Amitrajeet A. BATABYAL
Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA.
Seung JICK YOO
Corresponding Author. Graduate School of International Service, Sookmyung Women’s University, 100 Cheongpa-ro 47-gil, Yongsan-gu, Seoul, Republic of Korea.
We study innovation policy in a region in which the members of the creative class engage in Schumpeterian competition and thereby extend aspects of the recent analysis in Batabyal and Yoo (2017). Using the language of these researchers, the creative class is broadly composed of existing and candidate entrepreneurs. In contrast to these researchers, we suppose that R&D by candidate entrepreneurs does not generate any negative externalities. In this setting, we analyze the impact that taxes and subsidies on R&D by existing and candidate entrepreneurs have on R&D expenditures and regional economic growth.
Keywords: Creative Class, Creative Destruction, Economic Growth, Innovation Policy, R&D
JEL classification: R11, O31, O38