Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper constructs an R&D-based endogenous growth model with heterogeneous industries in which the parameters, including the contribution of R&D to productivity, differ by industry. Using this model to examine the optimal mix of R&D subsidies and patent protection, we obtain the following results. First, R&D subsidies should be set higher (lower) in industries with a higher (lower) contribution of R&D to productivity, whereas patent breadth should be set such that markups are uniform across all industries. Second, we derive the optimal mix in the situation where R&D subsidies and patent protection are uniform across industries and numerically show that the uniform constraint on R&D subsidies involves significant growth and welfare losses and that greater heterogeneity across industries significantly magnifies them.