Search results for "market failure"
showing 3 items of 23 documents
Essentials of Common Industrial Policy
2021
A set of sixteen principles of modern industrial policy is derived from the literature for application to entire regions. Such policy strives to create industrial commons and to rectify market failures which cannot reasonably be expected to self-correct over time. This chapter creates a workable typology of genuine regional industries, distinguishing two main types: Type I is the outcome of targeted selection and Type II of broad investment promotion. A ‘dual core’ of both types is appropriate to most African industrial ecosystems. The chapter goes on to clarify the distinction between regional production networks and stand-alone ‘lighthouses’. The incentive system for regional industries i…
STATE AID POLICY BETWEEN COMPETITION AND ECONOMIC GROWTH: THE IMPACT OF STATE AID TO R&D ON GDP IN THE EU MEMBER STATES
2012
The paper focuses on the analysis of the relationship between state aid to R&D and economic growth, measured by GDP level, providing empirical evidence of a correlation between these variables. Using a methodology which combines the regression technique and Granger causality, we found that GDP represents a significant causal determinant of state aid, while the correlation the variables considered is positive and statistically significant, suggesting that, in spite of disparities between Member States, government support through state aid to R&D has evolved from maintaining undistorted competition to the possibility to act as an incentive for the economic growth in the EU.
Government policy failure in public support for research and development
2014
peer-reviewed Promoting Research and Development (R&D) and innovative activity is a key element of the EU Lisbon Agenda and is seen as playing a central part in stimulating economic development. In this paper we argue that, even allowing for benevolent policy-makers, informational asymmetries can lead to a misallocation of public support for R&D, hence government policy failure, with the potential to exacerbate preexisting market failures. Initially, we explore alternative allocation mechanisms for public support, which can help to minimize the scale of these government policy failures. Of these mechanisms (grants, tax credits, or allocation rules based on past performance), our results sug…