State aid to investment and R&D /

The prohibition of state aid to investment and R&D in an integrated market such as the European Community is analysed in a Cournot oligopoly model where firms undertake investment or R&D to reduce their costs. Both strategic and non-strategic investment and R&D are considered. Government...

Πλήρης περιγραφή

Κύριος συγγραφέας: Collie, David R.
Corporate συγγραφέας: European Commission : Directorate-General for Economic and Financial Affairs.
Μορφή: Βιβλίο
Γλώσσα: Greek
English
Στοιχεία έκδοσης: Brussels- Belgium: European Comission: Directorate-General for Economic and Financial Affairs, 2005.
Σειρά: European Economy. Economic papers ; 231.
Διαθέσιμο Online: http://ec.europa.eu/economy_finance/publications/publication_summary622_en.htm
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520 0 |a The prohibition of state aid to investment and R&D in an integrated market such as the European Community is analysed in a Cournot oligopoly model where firms undertake investment or R&D to reduce their costs. Both strategic and non-strategic investment and R&D are considered. Governments in the Member States give subsidies for investment and R&D, which are financed by distortionary taxation so the opportunity cost of government revenue exceeds unity. • Prohibiting state aid to investment will always increase aggregate welfare. • Prohibiting state aid to R&D will always increase aggregate welfare if spillovers from R&D are small. • If spillovers from R&D are moderate then there exists a range of values for opportunity cost where governments give state aid and where the prohibition of state aid will increase aggregate welfare. • Prohibiting state aid to R&D will reduce aggregate welfare if spillovers from R&D are large. 
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