Government Subsidies to Private Military R&D Investment: DOD's IR&D Policy / Frank R. Lichtenberg.

Format:

Book

Author/Creator:

Lichtenberg, Frank R.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2745.

NBER working paper series no. w2745

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Government Subsidies to Private Military R&D Investment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1988.

Summary:

A relatively obscure defense procurement policy establishes a large subsidy to private military R&D investment. On the surface, it appears that the marginal subsidy to such investment is zero, but this is only true in the short run. Due to DOD's policy of allowable-cost determination, the long-run subsidy is substantial. It is much larger, in fact, than the subsidy provided by the R&D Tax Credit enacted in 1981. I calculate the subsidy by estimating an econometric model using contractor-level data from the Defense Contract Audit Agency. This subsidy may have an important influence on the amount and character of privately financed innovation in the U.S.

Notes:

Print version record

October 1988.