Social capital and investment in R&D: new externalities

Tiago Neves Sequeira, Alexandra Ferreira-Lopes

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

We introduce social capital in an endogenous growth model with physical capital, human capital, and research and development (R&D), and we compare the market with the efficient solutions. As social capital is not tradable in the market and since it favours research networks, it introduces new externalities in this framework. These externalities induce the market to invest less in social capital than would a social planner and decrease the tendency to underinvestment in R&D. We quantify the distortions in the model. In some conditions, the new distortions are strong enough to overcome the usual result of underinvestment in R&D.

Original languageEnglish
Pages (from-to)77-97
Number of pages21
JournalJournal of Business Economics and Management
Volume14
Issue number1
DOIs
Publication statusPublished - 1 Feb 2013

Keywords

  • endogenous growth
  • human capital
  • R&D
  • social capital

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