Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
A policymaker may intervene to lower royalties of licensed technology when state-owned firms have higher expenditures on technology. In this paper, we show that firms may more tend to imitate than to innovate when, due to this intervention, the marginal benefit of innovation shrinks in comparison with imitation. We empirically confirm this by comparing China to India, as these two countries promote state-owned firms to different degrees.