【主题】On the Aggregate and Distributional Effects of Innovation Policies (with Chengcheng Jia)
【摘要】We study the aggregate and distributional impact of fiscal subsidies on firms’ R&D investment using a heterogeneous-agent model featuring occupational choice, endogenous innovation, and financial frictions. We find that more productive entrepreneurs face more severe borrowing constraints when upgrading productivity through R&D expenditures and thus more substantially underinvest in innovation. We then compute the optimal shape and level of R&D subsidies and show that the non-linear subsidy that can correct the underinvestment due to financial frictions leads to more sizable welfare gains than the uniform subsidy. Although the non-linear subsidy policy increases income and wealth concentration, there would be large welfare gains for the vast majority of workers and low-wealth households if the resulting government surplus were used to lower income taxation.