Seminar: Cédric Schneider, KU Leuven and CBS.

Title: Mixed R&D incentives: the effect of R&D subsidies on patented inventions.

Abstract: This paper analyses the e¤ects of mixed public-private R&D in-

centives. In a simple model, I show in which cases it is optimal for the legislator to allow publicly funded inventions to be patented. In addition, I conduct an empirical test as to whether patents that were publicly sponsored are more "important" than non-subsidized ones.

The main results of the paper are: (i) blending patents and public subsidies will allow the funding agency to subsidize inventions that would otherwise not elicit investment because the private incentive will not fully cover the cost of the invention, (ii) the policy maker will only subsidize inventions that have a high social value and (iii) the empirical analysis shows that subsidized inventions result in more "important" patents, as measured by the number of forward citations.