Public investment and industry incentives in life-science research

Chenggang Wang, Yin Xia, Steven Buccola

Research output: Contribution to journalArticlepeer-review

13 Scopus citations


Life-science research has shifted rapidly from the public to the private sector, raising questions about government's remaining role. We shed light on the issue by employing a dynamic investment-response model to examine the public's impact on industry life-science research effort and success. We find that government expenditures in both basic biological research and agricultural and medical science create substantial spillovers for private firms. The spillovers are, unfortunately, partly nullified by government competition for scarce research inputs. Yet even after accounting for such competition, public investment has been strongly complementary to private investment. Indeed, opportunities created through public research are the principal source of growth in industry life sciences.

Original languageEnglish
Pages (from-to)374-388
Number of pages15
JournalAmerican Journal of Agricultural Economics
Issue number2
StatePublished - 2009


  • Biotechnology
  • Dynamic investment
  • Life-science research
  • Private investment
  • Public R and D
  • Research policy


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