Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194121
Authors: 
Gersbach, Hans
Schetter, Ulrich
Schneider, Maik T.
Year of Publication: 
2018
Series/Report no.: 
Economics Working Paper Series 18/298
Abstract: 
What is the economic rationale for investing in science? Based on an open economy model of creative destruction, we characterize four key factors of optimal investment in basic research: the stage of economic development, the strength of the manufacturing base, the degree of openness, and the share of foreign-owned firms. For each of these factors, we analyse its bearings on optimal basic research investment. We then show that the predicted effects are consistent with patterns observed in the data and discuss how the factor-based approach might inform basic research policies.
Subjects: 
Basic Research
Economic Growth
Growth Policy
JEL: 
H41
O38
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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