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The equilibrium allocation of creative capital to R&D in a dynamic creative region

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  • Batabyal, Amitrajeet
  • Beladi, Hamid

Abstract

In this note, we analyze a stylized creative region that is populated by members of the creative class. The representative individual in this region possesses a constant relative risk aversion (CRRA) utility function. The existing creative capital is used to produce a final consumption good and to conduct R&D. We first derive the equilibrium level of creative capital that is allocated to the R&D sector. Next, we show how this level is affected by changes in the parameters and in some of the model constants. Finally, we discuss the policy implications of our comparative statics results.

Suggested Citation

  • Batabyal, Amitrajeet & Beladi, Hamid, 2014. "The equilibrium allocation of creative capital to R&D in a dynamic creative region," MPRA Paper 72325, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:72325
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    References listed on IDEAS

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    1. Kristina Vaarst Andersen & Høgni Kalsø Hansen & Arne Isaksen & Mika Raunio, 2010. "Nordic City Regions in the Creative Class Debate—Putting the Creative Class Thesis to a Test," Industry and Innovation, Taylor & Francis Journals, vol. 17(2), pages 215-240.
    2. Amitrajeet Batabyal & Peter Nijkamp, 2013. "The creative class, its preferences, and unbalanced growth in an urban economy," Journal of Evolutionary Economics, Springer, vol. 23(1), pages 189-209, January.
    3. David Mcgranahan & Timothy Wojan, 2007. "Recasting the Creative Class to Examine Growth Processes in Rural and Urban Counties," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 197-216.
    4. Mary Donegan & Nichola Lowe, 2008. "Inequality in the Creative City: Is There Still a Place for “Old-Fashioned†Institutions?," Economic Development Quarterly, , vol. 22(1), pages 46-62, February.
    5. Margaret Olfert & Mark Partridge, 2011. "Creating the Cultural Community: Ethnic Diversity vs. Agglomeration," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(1), pages 25-55.
    6. Roberta Comunian & Alessandra Faggian & Qian Cher Li, 2010. "Unrewarded careers in the creative class: The strange case of bohemian graduates," Papers in Regional Science, Wiley Blackwell, vol. 89(2), pages 389-410, June.
    7. Mark Lorenzen & Kristina Vaarst Andersen, 2009. "Centrality and Creativity: Does Richard Florida’s Creative Class Offer New Insights into Urban Hierarchy?," Economic Geography, Taylor & Francis Journals, vol. 85(4), pages 363-390, October.
    8. Ann Markusen, 2006. "Urban Development and the Politics of a Creative Class: Evidence from a Study of Artists," Environment and Planning A, , vol. 38(10), pages 1921-1940, October.
    9. Amitrajeet Batabyal & Peter Nijkamp, 2010. "Richard Florida’s creative capital in a trading regional economy: a theoretical investigation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 241-250, April.
    10. Mark Lorenzen & Kristina Vaarst Andersen, 2009. "Centrality and Creativity: Does Richard Florida's Creative Class Offer New Insights into Urban Hierarchy?," Economic Geography, Clark University, vol. 85(4), pages 363-390, October.
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    Cited by:

    1. Batabyal, Amitrajeet A. & Yoo, Seung Jick, 2017. "On research and development in a model of Schumpeterian economic growth in a creative region," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 69-74.

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    More about this item

    Keywords

    Creative Capital; Creative Class; Dynamics; Economic Growth; R&D;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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