On the Global Supply of Basic Research

Arbeitspapier

In this paper we study the incentives for basic-research investments by governments in a globalized world. For this purpose, we develop a two-country Schumpeterian growth model in which each country chooses its basic-research investments. We find that a country's basic-research investments increase with the country's level of human capital and decline with its own market size. This may explain the large basic-research investments by small open economies. Compared with the optimal investments achievable when countries coordinate their basic-research policies, a single country may over-invest in basic research. However, in the decentralized case the total amount of basic-research investments is always below the socially optimal investment level, which justifies policy coordination in this area.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 13/175

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives ; Technological Change: Government Policy
• Subject: basic research ; public goods ; economic growth ; coordination of governments ; Grundlagenforschung ; Investitionspolitik ; Technologiepolitik ; Öffentliche Güter ; Wirtschaftswachstum ; Zwei-Länder-Modell ; Kleine offene Volkswirtschaft ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans ; Schneider, Maik T.
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2013

Further information

• DOI: doi:10.3929/ethz-a-007634769
• Handle: http://hdl.handle.net/10419/171618
• Last update: 10.03.2025, 11:44 AM CET