Government Financing of R&D: A Mechanism Design Approach

• 成果类型: Article
• 署名作者: Lach, Saul; Neeman, Zvika; Schankerman, Mark
• 署名单位: Hebrew University of Jerusalem; Centre for Economic Policy Research - UK; Tel Aviv University; University of London; London School Economics & Political Science
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190053
• 发表日期: 2021
• 页码: 238-272
• 关键词: innovation; constraints; subsidies

摘要

We study how to design an optimal government loan program for risky R&D projects with positive externalities. With adverse selection, the optimal government contract involves a high interest rate but nearly zero cofinancing by the entrepreneur. This contrasts sharply with observed loan schemes. With adverse selection and moral hazard, allowing for two levels of effort by the entrepreneur, the optimal policy consists of a menu of at most two contracts, one with high interest and zero self-financing and a second with a lower interest plus cofinancing. Calibrated simulations assess welfare gains from the optimal policy, observed loan programs, and a direct subsidy to private venture capital firms. The gains vary with the size of the externalities, the cost of public funds, and the effectiveness of the private venture capital industry.