Complementarities in innovation policy

This paper presents preliminary research carried out at CIRANO and aims at encouraging discussion and comment

Pierre Mohnen


Scholarcy highlights

  • The question as to whether policy variables are interrelated is important
  • This paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation
  • We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints
  • Complementary in the intensity of innovation appears to be more pronounced than in the probability of becoming an innovator. This indicates that these two innovation processes, i.e. the intensity of innovation vs. the probability of becoming an innovator are subject to different constraints
  • This implies that policies to remove obstacles to innovation may result in rather different effects, depending on whether they are designed to stimulate innovation by incumbents or to stimulate entry

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