Human capital and overinvestment in R&D
Reis, A.B., T.N. Sequeira
,
(2007)
,
"Human capital and overinvestment in R&D"
,
Scandinavian Journal of Economics
,
109
,
573-591
.
Abstract
We introduce a negative effect of technological development on human capital accumulation in a growth model with endogenous innovation and accumulation of human capital. This implies a negative externality of R&D in human capital accumulation. Some calibration exercises suggest that this distortion may be sufficiently strong not only to offset the usual effects of spillovers and of returns to specialization but also to induce overinvestment in R&D.