Basic research, openness, and convergence

Hans Gersbach, Maik Schneider, Olivier Schneller

Research output: Contribution to journalArticle

18 Citations (Scopus)
139 Downloads (Pure)

Abstract

We study a model where economic growth is fueled by public basic-research investment and the importation of leading technology from foreign countries. In each period, the government chooses the amount of basic research, balancing the costs and benefits of stimulating growth through both channels. We establish the existence of steady states and
the long-run share of technologically advanced sectors in the economy. Then we explore how different degrees of openness affect long-term incentives to invest in basic research. Our main insight is that higher openness tends to encourage more investment in basic research, which, in turn, yields a larger share of leading sectors. If, however, there are prospects of
importing major technology advances, highly open countries will reduce basic research as such imports become particularly valuable.
Original languageEnglish
Pages (from-to)33 - 68
Number of pages35
JournalJournal of Economic Growth
Volume18
Issue number1
DOIs
Publication statusPublished - Mar 2013

Keywords

  • Basic research
  • Openness
  • Economic growth

ASJC Scopus subject areas

  • Economics and Econometrics

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  • Projects

    Basic Research and Growth Policy

    Schneider, M., Gersbach, H. & Schetter, U.

    1/07/079/04/18

    Project: Other

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