Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
In this paper, the authors consider the case for subsidies toward firms which generate R&D spillovers in open economies. They show that, in the presence of strategic behavior by firms, many expected results are overturned. Local R&D spillovers to other domestic firms may justify an R&D tax rather than a subsidy; R&D cooperation by local firms overinternalizes the externality and also justifies an R&D tax; and international spillovers that benefit foreign firms may justify a subsidy, even though the government cares only about the profits of home firms. Copyright 1999 by Royal Economic Society.