HETEROGENEOUS ACADEMIC-INDUSTRY KNOWLEDGE LINKAGE, HETEROGENEOUS IPR, AND GROWTH LUCA SPINESI University of Rome Abstract Empirical evidence shows the existence of relevant spillovers from the stock of academic basic knowledge on industry. Interestingly, such spillovers are highly specific in that firms’ academic learning responds strongly to feder- ally funded R&D in closely affiliated universities. Moreover, with the aim of enhancing such a technological transfer from academia to industry, the policy design of many OECD countries allows worthy academic ideas to be granted the same intellectual property rights (IPR) as industrial innova- tions. In distinguishing the stages of an R&D process within a dynamic general equilibrium model, this paper explicitly considers both industrial and government R&D efforts, with heterogeneous academic knowledge spillovers among in- dustry lines. The results show that both the industrial R&D effort and the growth rate are spurred more by a “softer” IPR regime granted to academic ideas than by an increase in the industrial R&D subsidy. 1. Introduction The role of both scientific knowledge and technological innovations in spurring the growth performance of countries is emphasized by both aca- demic and nonacademic analyses. The OECD Science, Technology and In- dustry Outlook (2006) shows an average annual increase of 3.8% in real Luca Spinesi, Department of Economics, University of Rome 3, Rome, Italy (lspinesi@ uniroma3.it). I would like to thank two anonymous referees, seminar participants at Ecole Politech- nique of Paris, Royal Economic Society Meeting 2009 at the University College of London, University of Bath, Toulouse School of Economics, EPIP Conference 2008 at the University of Bern, University Statale of Milan. All errors are mine. Received April 7, 2009; Accepted July 11, 2011. C  2012 Wiley Periodicals, Inc. Journal of Public Economic Theory, 14 (1), 2012, pp. 67–98. 67