R. Weder et Hg. Grubel, THE NEW GROWTH THEORY AND COASEAN ECONOMICS - INSTITUTIONS TO CAPTUREEXTERNALITIES, Weltwirtschaftliches Archiv, 129(3), 1993, pp. 488-513
This paper presents the main theoretical arguments which lead many adh
erents of the New Growth Theory to the conclusion that externalities i
n research and development are important for economic growth and warra
nt government subsidies. In contrast, the authors point to private ins
titutions like associations, company structures and industry clusters
which can capture such externalities. An international comparison of p
rivate R&D investment and special features of institutions in Switzerl
and and Japan are in line with this hypothesis. Thus, the argument for
R&D subsidies made by the New Growth Theory is considerably reduced.