Title

Three essays on R&D investment and economic development

Date of Award

2004

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Public Administration

Advisor(s)

Stuart Bretschneider

Keywords

Economic development, R&D investment, Tax credit, Government subsidy, Innovation

Subject Categories

Economics | Public Administration | Public Affairs, Public Policy and Public Administration | Social and Behavioral Sciences

Abstract

This three-essay dissertation offers three empirical studies based on a unified framework combining innovation-based economic development and policy-induced R&D investment. The first two essays are cross-national studies. The empirical results show that national governments can promote economic growth through encouraging domestic business R&D investment by policy actions. I found that direct government subsidies work better than tax incentives in stimulating self-financed business R&D spending. The enforcement and duration of patent right also matter to business R&D investment. While domestic R&D has positive impact on national productivity across countries, the effect of foreign R&D spillovers is context-dependent--positive for some countries but negative for others.

The third essay explores the effect of state research and development (R&D) tax credits on private R&D expenditure in the states. I found that the establishment of state R&D credit programs is effective in stimulating more industrial R&D spending in the states. State services in higher education and some cooperative technology programs also matter in private decision of R&D investment. Given the great importance of industrial R&D to economic development, this study contributes to public finance literature on economic development by paving the way to a full assessment of state tax incentives for R&D in promoting economic development.

The combination of innovation-based economic development and policy-induced R&D investment offers better opportunity to explore economic effects of government R&D policies. My dissertation has made important progress, and will lead to a new academic field--innovation finance--in state and local government finance.

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