Subsidizing the R&D Expenditures for a Monopoly Firm: Advice for NIST

The Advanced Technology Program (ATP) of the National Institute for Standards and Technology (NIST) subsidizes the R&D expenditure of large single firms at a maximum rate of 40%. The theoretical analysis herein of a monopoly innovator suggests that this subsidy rate is about socially optimal when spillovers to other industries are small and only incremental R&D expenditure is subsidized. The optimal subsidy when these two conditions are not met is also discussed.

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Year of publication:	2007
Authors:	Highfill, Jannett ; Scott, Robert
Published in:	The Journal of Economics. - Missouri Valley Economic Association - MVEA, ISSN 0361-6576. - Vol. 33.2007, 2, p. 21-40
Publisher:	Missouri Valley Economic Association - MVEA

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Type of publication:	Article
Classification:	O38 - Government Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010857387