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R&D Subsidies and Multinational Firm Ownership

Author

Listed:
  • Gretz Richard T

    (Bradley University)

  • Highfill Jannett

    (Bradley University)

  • Scott Robert C

    (Bradley University)

Abstract

Most industrialized countries subsidize private sector R&D, even under some circumstances when the firm is owned by foreigners. The present paper, using a simple theoretical analysis of a monopoly firm selling only to the U.S. market, argues that such subsidies are welfare enhancing--as long, of course--as the funding agency chooses the projects it funds wisely. The paper suggests that a subsidy rate of 50% might be warranted under some circumstances.

Suggested Citation

  • Gretz Richard T & Highfill Jannett & Scott Robert C, 2007. "R&D Subsidies and Multinational Firm Ownership," Global Economy Journal, De Gruyter, vol. 7(1), pages 1-47, February.
    • Handle: RePEc:bpj:glecon:v:7:y:2007:i:1:n:5
    DOI: 10.2202/1524-5861.1248
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