【 The Digital Star Seminar Series No.15 】Innovation Networks and Innovation Policy
Date: 15 April 2022 (Fri)
Time: 9:00am - 10:30am (Hong Kong Time, UTC+8)
Platform: Tencent Meeting (ID 272-253-560)
Host: Prof. Miaojun Wang (School of Economics, Zhejiang University)
Presenter: Prof. Ernest Liu (Princeton University)
We study the optimal allocation of R&D resources in an endogenous growth model with an innovation network, through which one sector’s past innovations may benefit other sectors’ future innovations. First, we provide closed-form sufficient statistics for the optimal path of R&D resource allocation, and we show that planners valuing long-term growth should allocate more R&D toward key sectors that are upstream in the innovation network. Second, we extend to an open-economy setting and illustrate an incentive for countries to free-ride on fundamental technologies: an economy more reliant on foreign knowledge spillovers has less incentive to direct resources toward innovation-upstream sectors, leading to cross-country differences in unilaterally optimal R&D allocations across sectors. Third, we build the global innovation network based on over 30 million global patents and establish its empirical importance for knowledge spillovers. Fourth, we apply the model to evaluate R&D allocations across countries and time. Adopting optimal R&D allocations can generate substantial welfare improvements across the globe. For the United States, R&D misallocation accounts for about 0.68 percentage points of missing annual growth since the 2000s.
Intro to Prof. Ernest Liu:
Ernest Liu is an Assistant Professor at the Bendheim Center for Finance at Princeton's Department of Economics. His research interests are in finance, networks, trade, growth, and macro-development.His articles have been published on Econometrica, Quarterly Journal of Economics, Journal of Financial Economics, etc.
- The Chinese University of Hong Kong-Zhejiang University Joint Research Center for Digital Economy
- China Digital Economy Research Center of School of Economics, Zhejiang University
- Zhejiang University Digital Economy Innovation Research Team
Intro to The Digital Star Seminar Series：
The Digital Star Seminar Series is co-hosted by the China Digital Economy Research Center of School of Economics, Zhejiang University, and the Chinese University of Hong Kong-Zhejiang University Joint Research Center for Digital Economy. This series of seminars will study the development of the digital economy and China's economic transformation based on the practice of China's digital transformation. We will invite domestic and overseas scholars to share and discuss the latest research on the digital economy and the Chinese economy. We hope that this academic platform can become a paradise for the study of the digital economy. More importantly, it can generate insights that significantly impact the digital economy and Chinese economy, which will help promote digital transformation and high-quality economic development in Chinese society.