Discussion Papers No. 635, November 2010 Statistics Norway, Research Department
Geir H. Bjertnæs, Tom-Reiel Heggedal and Karl Jacobsen
Knowledge spillovers and the timing of R&D policy
Abstract:
We analyze how knowledge spillovers influence the optimal timing of R&D policy. Using numerical simulations we find that optimal subsidies to R&D may be rising over time even when the returns to knowledge is decreasing. The optimal time profile of the subsidies is determined by the elasticity of scale in the R&D production function, which again depends on both the returns to knowledge and the returns to labor.
Keywords: Innovation policy; R&D; Technological spillovers.
JEL classification: O32; O38.
Acknowledgements: The autors would like to thank Knut Einar Rosendahl, Mads Greaker, and Erling Holmøy for useful comments. Financial support from the Norwegian Research Council is greatly acknowledged.
Address: Geir H. Bjertnæs, Statistics Norway, Research Department. E-mail: [email protected] Tom-Reiel Heggedal, Statistics Norway, Research Department. E-mail: [email protected] Karl Jacobsen, Statistics Norway, Research Department. E-mail: [email protected]
Discussion Papers comprise research papers intended for international journals or books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article, as it may include intermediate calculations and background material etc.
© Statistics Norway
Abstracts with downloadable Discussion Papers in PDF are available on:
http://www.ssb.no
http://ideas.repec.org/s/ssb/dispap.html
#(&$)($#
%ABJ?87:8 FC<??BI8EF 9EB@ + <@C?L G;4G :BI8EA@8AGF F;BH?7 FHCCBEG + 46G<I<GL 86E84F<A: E8GHEAF GB >ABJ?87:8 $BA8F @<:;G FH::8FG G;4G G;8 FC<??BI8EF 786?<A8 BI8E G<@8 'BE8BI8E G;8 8K<FG<A:
?<G8E4GHE8 BA G;8 G<@<A: <FFH8 NA7 G;4G :BI8EA@8AGFP FHCCBEG F;BH?7 94??
BI8E G<@8 "BJ8I8E <A G;<F C4C8E J8 NA7 G;4G BCG<@4? FH5F<7<8F GB +
@4L 58 E<F<A: BI8E G<@8 J;8A G;8 E8GHEAF GB >ABJ?87:8 <F 786E84F<A:
@4=BE 6;4??8A:8 <A 78F<:A<A: + CB?<6<8F <F GB 78G8E@<A8 G;8 @4:
A<GH78 B9 G;8 8KG8EA4? 8T86GF 4FFB6<4G87 J<G; + 46G<I<G<8F !E<?<6;8F $BA8F 4A7 /<??<4@F %?8GG8 8G 4? )A8 @4=BE 6B@CB A8AG B9 G;8 8KG8EA4? 8T86GF 6BAF<FGF B9 >ABJ?87:8 FC<??BI8EF L >ABJ?
87:8 FC<??BI8EF J8 @84A G;4G G;8 >ABJ?87:8 :8A8E4G87 9EB@ NE@FP + 46G<I<GL FC<??F BI8E GB BG;8E NE@F 4A7 8KC4A7F ?4G8E + BCCBEGHA<
G<8F -;8F8 FC<??BI8EF 4E8 8KG8EA4? GB G;8 <A7<I<7H4? NE@F 4A7 F;BH?7 58 G4E:8G87 5L CB?<6L @84FHE8F 8: FH5F<7<8F A + CB?<6L 4<@87 4G 6BEE86G<A: G;8 8KG8EA4? 8T86G E8DH<E8F 8FG<@4G8F B9 G;8 F<M8 B9 G;8 >ABJ?
87:8 FC<??BI8EF HEG;8E G;8 + CB?<6L @B78?<A: 4?FB A887F GB 477E8FF G;8 G<@<A: B9 G;8 :BI8EA@8AG FHCCBEG GB + 46G<I<GL ,HCCBEG GB + F;BH?7 6;4A:8 BI8E G<@8 <9 G;8 @4:A<GH78 B9 >ABJ?87:8 FC<??BI8EF 7<T8EF 58GJ88A G<@8 C8E<B7F
-;8 ?<G8E4GHE8 BA G;8 G<@<A: <FFH8 <F E4G;8E ?<@<G87 )A8 B9 G;8 98J FGH7<8F G;4G 4A4?LM8 G;8 6;4A:8 <A BCG<@4? + FH5F<7<8F BI8E G<@8 <F
*8E8M,854FG<4A *8E8M,854FG<4A 78I8?BCF 4 :EBJG; @B78?
J<G; <@<G4G<BA B9 9BE8<:A <784F -;8E8 <F 4 A8:4G<I8 8KG8EA4?<GL 9EB@ + 46G<I<GL FG8@@<A: 9EB@ E87H687 <@<G4G<BA BCCBEGHA<G<8F 4F G;8 86BAB@L 466H@H?4G8F >ABJ?87:8 L AH@8E<64? F<@H?4G<BAF ;8 F;BJF G;4G + FH5F<7<8F F;BH?7 58 E<F<A: BI8E G;8 GE4AF<G<BA C4G; GBJ4E7F G;8 54?4A687 :EBJG; C4G; "BJ8I8E G;8 @4<A 7E<I8E B9 G;<F E8FH?G <F G;8 E87H6G<BA <A G;8 <@<G4G<BA 8KG8EA4?<GL BI8E G<@8 E4G;8E G;4A 6;4A:8F <A G;8 >ABJ?87:8 FC<??BI8EF
-;8E8 4E8 FB@8 FGH7<8F B9 G;8 G<@<A: <FFH8 9BE FH5F<7<8F GB 8AI<EBA
@8AG4? G86;AB?B:<8F -;8 G<@<A: B9 BCG<@4? 8AI<EBA@8AG4? + FH5F<
7<8F <F FGH7<87 5L !8E?4:; 8G 4? 4A7 -;8L 78I8?BC 4 G;8 BE8G<64? :EBJG;@B78? 4A7 NA7 G;4G G;8 BCG<@4? + FH5F<7L E4G8 GB 454G8@8AG G86;AB?B:<8F 94??F BI8E G<@8 "BJ8I8E G;8<E NA7<A: <F FG8@
@<A: 9EB@ <A8S6<8A6<8F <A G;8 + @4E>8G E8?4G87 GB ?<@<G87 C4G8AG
?<98G<@8 E4G;8E G;4A 9EB@ 4 6;4A:8 <A G;8 F<M8 B9 >ABJ?87:8 FC<??BI8EF BI8E G<@8 %I8EA7B>> 4A7 +BF8A74;? NA7 G;4G A8J?L 47BCG87 G86;AB?B:<8F F;BH?7 58 FH5F<7<M87 @BE8 G;4A B?78E G86;AB?B:<8F <A 4 G;8 BE8G<64? @B78? J;8E8 ?84EA<A: 8T86GF 4E8 4A4?LM87 -;8 ?84EA<A: 8T86GF 4E8 FGEBA:8FG 9BE A8J?L 47BCG87 G86;AB?B:<8F FB G;4G G;8 BCG<@4? FH5 F<7<8F 786E84F8 BI8E G<@8 4F G;8 ?84EA<A: 8T86GF 7<@<A<F; -;8<E G86;
AB?B:L 8KG8EA4?<G<8F ;BJ8I8E 6B@8 9EB@ ?84EA<A: 8T86GF 4F BCCBF87 GB + 8KG8EA4?<G<8F :8A8E4G87 5L BCG<@<M<A: + NE@F "8::874? 4A7
$46B5F8A 4A4?LM8 8AI<EBA@8AG4? + FH5F<7L E89BE@F J<G;<A 4 6B@CHG45?8 :8A8E4? 8DH<?<5E<H@ @B78? B9 G;8 (BEJ8:<4A 86BAB@L -;8L NA7 G;4G 4A + FH5F<7L E4G8 786E84F<A: BI8E G<@8 :8A8E4G8F G;8 @BFG 8S6<8AG BHG6B@8 "BJ8I8E <G <F ABG 6?84E J;8G;8E G;8<E E8FH?G 5BG;
6BAFG<GHG8F G;8 BCG<@4? G<@8 CEBN?8 4A7 ;B?7F 9BE + J<G;<A BG;8E 86BAB@<8F <A :8A8E4?
#A G;<F C4C8E J8 FGH7L ;BJ G;8 <A8S6<8A6L 64HF87 5L >ABJ?87:8 FC<??BI8EF <AOH8A68 G;8 G<@<A: B9 BCG<@4? + CB?<6L /8 FB?I8 AH@8E
<64??L 4A <AG8EG8@CBE4? @4K<@<M4G<BA CEB5?8@ J;8E8 G;8 :BI8EA@8AG 6;BBF8F BCG<@4? + FH5F<7L E4G8F <A 846; C8E<B7 /8 NA7 G;4G 4A 8?4FG<6<GL B9 F64?8 ?4E:8E G;4A BA8 <A G;8 + CEB7H6G<BA 9HA6G<BA <@
C?<8F <A6E84F<A: FH5F<7L E4G8F J;<?8 4A 8?4FG<6<GL B9 F64?8 F@4??8E G;4A BA8
<@C?<8F 94??<A: FH5F<7<8F HEG;8E G;8 F<@H?4G<BAF :<I8 6BAFG4AG BCG<@4?
FH5F<7L E4G8F BI8E G<@8 <9 G;8 8?4FG<6<GL B9 F64?8 <F 8DH4? GB BA8
-;8E8 4E8 I4E<BHF 8FG<@4G8F B9 G;8 BHGCHG 8?4FG<6<G<8F B9 G;8 <ACHGF GB G;8 + CEB7H6G<BA 9HA6G<BA 8: G;8 8?4FG<6<G<8F J<G; E8FC86G GB
>ABJ?87:8 4A7 ?45BE "BJ8I8E @BFG FGH7<8F NA7 G;8 8?4FG<6<GL B9 F64?8
<A G;8 + CEB7H6G<BA 9HA6G<BA GB 58 ?4E:8E G;4A BA8 J;<6; <@C?<8F G;4G <A6E84F<A: + FH5F<7<8F 4E8 BCG<@4? "8A68 J8 4EE<I8 4G G;8 BCCBF<G8 6BA6?HF<BA 6B@C4E87 GB G;8 8K<FG<A: ?<G8E4GHE8 BA G;8 G<@<A:
<FFH8 9BE FH5F<7<8F GB 8AI<EBA@8AG4? G86;AB?B:<8F 7<F6HFF87 45BI8 -;8 <AGH<G<BA 58;<A7 BHE E8FH?GF <F 9BHA7 5L 6BAF<78E<A: ;BJ 4 @4E :<A4? <A6E84F8 <A G;8 FGB6> B9 >ABJ?87:8 4T86GF 9HGHE8 CEB7H6G<BA B9
>ABJ?87:8 <EFG G;8 CEB7H6G<I<GL :4<A 9EB@ 4 A8J <784 <F 786?<A<A:
<A G;8 F<M8 B9 G;8 >ABJ?87:8 FGB6> <9 G;8 BHGCHG 8?4FG<6<GL J<G; E8FC86G GB >ABJ?87:8 <F F@4??8E G;4A BA8 <8 786E84F<A: E8GHEAF GB A8J <784F
$BA8F 4A7 "8A68 G;<F 8T86G 6BAGE<5HG8F GB 7<@<A<F; G;8 8KG8EA4? 8T86G 9EB@ + 6BA7H6G87 <A ?4G8E C8E<B7F 4F G;8 FGB6> B9
>ABJ?87:8 :EBJF ,86BA7 4 @4E:<A4? <A6E84F8 <A G;8 FGB6> B9 >ABJ?87:8 4?FB :8A8E4G8F 4A 8KC4AF<BA B9 ?45BE <AGB E8F84E6; J;<6; 6BAGE<5HG8F GB
<A6E84F8 G;8 CEB7H6G<BA B9 >ABJ?87:8 -;8 <AGH<G<BA 58;<A7 G;<F 8T86G
<F G;4G G;8 CEB7H6G<I<GL B9 G;8 + NE@F <A6E84F8 J;8A G;8 FGB6> B9
>ABJ?87:8 <A6E84F8F *EBNG @4K<@<M<A: + NE@F ;<E8 @BE8 JBE>8EF J;8A G;8<E CEB7H6G<I<GL <A6E84F8F 4A7 G;<F 6BAGE<5HG8F GB 8KC4A7 G;8 9H GHE8 CEB7H6G<BA B9 >ABJ?87:8 "8A68 G;<F 8T86G 6BAGE<5HG8F GB <A6E84F8 G;8 8KG8EA4? 8T86G B9 + 4F @BE8 JBE>8EF J<?? HG<?<M8 G;8 >ABJ?87:8 <A 9HGHE8 C8E<B7F
-;8 GBG4? <A6E84F8 <A 9HGHE8 CEB7H6G<BA B9 >ABJ?87:8 :8A8E4G87 5L 4
,88 *BEG8E 4A7 ,G8EA !BA: 8G 4? 57<; 4A7 $BHGM *8FFB4 4A7 ,4@4A<8:B 9BE 8FG<@4G8F B9 G;8 8?4FG<6<G<8F
@4E:<A4? <A6E84F8 <A G;8 FGB6> B9 >ABJ?87:8 <F 6BAFG4AG BI8E G<@8 J;8A G;8 8?4FG<6<GL B9 F64?8 8DH4?F BA8 4F G;8 F86BA7 8T86G 64A68? BHG G;8 NEFG 8T86G -;8F8 8T86GF ;4I8 CEBI8A 6EH6<4? 9BE G;8 BCG<@4? 7<T8E8AG<4G<BA B9 + FH5F<7<8F 58GJ88A F86GBEF "8::874? NA7F G;4G G;8 8@8E:<A:
G86;AB?B:L J<G; G;8 F@4??8E >ABJ?87:8 FGB6> F;BH?7 58 FH5F<7<M87 @BE8
?8FF <9 G;8 F64?8 8?4FG<6<GL <F F@4??8E ?4E:8E G;4A BA8
-;8 C4C8E <F BE:4A<M87 4F 9B??BJF -;8 @B78? <F ?4<7 BHG <A ,86G<BA J;<?8 ,86G<BA 4A4?LM8F G;8 BCG<@4? G<@8 CEBN?8 B9 G;8 FH5F<7L E4G8F GB + HF<A: F<@H?4G<BAF ,86G<BA 6BA6?H78F
"$!
#A BE78E GB 4A4?LM8 ;BJ G;8 8KG8EA4?<G<8F 9EB@ >ABJ?87:8 FC<??BI8EF 49 986G G;8 BCG<@4? 7<FGE<5HG<BA B9 CB?<6L <A68AG<I8F 46EBFF G<@8 J8 BA?L
@B78? G;8 + <A7HFGEL /8 45FGE46G 9EB@ G;8 E8FG B9 G;8 86BAB@L
<A BE78E GB 9B6HF BA G;8 HA78E<AI8FG@8AG <A + 64HF87 5L G;8 >ABJ?
87:8 FC<??BI8EF /8 4FFH@8 G;4G G;8 + <A7HFGEL <F E8?4G<I8?L F@4??
6B@C4E87 GB G;8 J;B?8 86BAB@L FB G;4G <ACHG 4A7 BHGCHG CE<68F 4E8 6BAFG4AG ,86G<BA E8?4K8F G;<F 4FFH@CG<BA
#A G;8 @B78? CE<I4G8 + NE@F 8AG8E G;8 @4E>8G <A 846; C8E<B7 4A7 CEB7H68 C4G8AGF J<G;BHG G4><A: <AGB 466BHAG G;4G G;8<E CEB7H6G<BA B9
>ABJ?87:8 FC<??F BI8E GB 9HGHE8 + -;8 FB6<4? C?4AA8E @4K<@<M8F G;8 7<F6BHAG87 FB6<4? FHEC?HF 4A7 F8GF BCG<@4? FH5F<7<8F 9BE G;8 J;B?8 G<@8 C8E<B7 GB 6BEE86G 9BE G;8 8KG8EA4?<GL FG8@@<A: 9EB@ >ABJ?87:8 FC<??BI8EF
#$!$-
-;8 4::E8:4G8 CEB7H6G<BA B9 A8J C4G8AGF >ABJ?87:8 <A G;8 86BAB@L
<F :<I8A 5L G;8 GLC8 B9 CEB7H6G<BA 9HA6G<BA G;4G <F HF87 <A 8A7B:8ABHF :EBJG; @B78?F J<G; ;BE<MBAG4? <AABI4G<BA 8: +B@8E 4A7 J<G;
I8EG<64? <AABI4G<BA 8: :;<BA 4A7 "BJ<GG
J;8E8 <F G;8 CEB7H6G<BA B9 C4G8AGF <F G;8 ?45BE <ACHG
<F G;8 BHGCHG 8?4FG<6<GL J<G; E8FC86G GB ?45BE <F G;8 466H@H?4G87 C4G8AGF 9EB@ CE8I<BHF C8E<B7F <8 G;8 >ABJ?87:8 FGB6> 4A7 <F G;8 BHGCHG 8?4FG<6<GL J<G; E8FC86G GB C4G8AGF <8 G;8 FC<??BI8E C4E4@8G8E -;8 786E84F<A: E8GHEAF J<G; E8FC86G GB ?45BE BA 4A 4::E8:4G8 ?8I8? <F
@BG<I4G87 5L ;8G8EB:8A8BHF CEB7H6G<I<GL 58GJ88A E8F84E6; CEB=86GF <A G;8 + <A7HFGEL F88 G;8 9B??BJ<A: F86G<BA -;8 FC<??BI8E C4E4@8G8E E8O86GF G;8 8T86G B9 G;8 8K<FG<A: >ABJ?87:8 FGB6> BA G;8 CEB7H6G<BA B9 A8J C4G8AGF /8 7B ABG E8FGE<6G G;8 I4?H8F 64A G4>8 :<I8F
<A6E84F<A: E8GHEAF GB >ABJ?87:8 4A7 :<I8F 786E84F<A: E8GHEAF GB
>ABJ?87:8 :<I8F A8:4G<I8 FC<??BI8EF <8 NF;<A: BHG 8T86G -;8 8?4FG<6<GL B9 F64?8 <A + CEB7H6G<BA 8DH4?F
-;8 >ABJ?87:8 FGB6> 8IB?I8F 466BE7<A: GB
J;8E8 <F G;8 <A<G<4? >ABJ?87:8 FGB6>
#)'(&-
-;8 NE@F <A G;8 + <A7HFGEL F8?? C4G8AGF 4G 4 :<I8A CE<68 /8 4FFH@8 G;4G 4?? C4G8AGF ;4I8 G;8 F4@8 I4?H8 <A G;8 @4E>8G <8 4?? G;8 NE@F 9468 G;8 F4@8 C4G8AG CE<68
/;8A 4 C4G8AG <F CEB7H687 G;8 >ABJ?87:8 8@587787 <A G;8 C4G8AG
<F 9E88?L 4I4<?45?8 GB BG;8E NE@F <A 9HGHE8 C8E<B7F <8 G;8 >ABJ?87:8 FGB6> <F 4 CH5?<6 :BB7 -;8 NE@F 7B ABG G4>8 <AGB 466BHAG G;4G G;8<E C4G8AG CEB7H6G<BA <AOH8A68 G;8 CEB7H6G<I<GL B9 9HGHE8 + /8 4FFH@8 G;4G G;8E8 4E8 AB BG;8E 8KG8EA4?<G<8F "8A68 G;8 BA?L 8KG8EA4?<GL <A BHE
@B78? FG8@F 9EB@ G;8 >ABJ?87:8 FC<??BI8EF
HEG;8E <A 846; C8E<B7 G;8E8 <F 4 6BAG<AHH@ B9 E8F84E6; CEB=86GF J<G;
7<T8E8AG CEB7H6G<I<GL ;<:; CEB7H6G<I<GL CEB=86G E8DH<E8F ?8FF ?45BE GB CEB7H68 4 C4G8AG G;4A 4 ?BJ CEB7H6G<I<GL CEB=86G -;8 <A7<I<7H4? NE@F 4E8 8AG<G<8F J<G; CE<I4G8 <A9BE@4G<BA B9 BA8 B9 G;8 E8F84E6; CEB=86GF #A 846; C8E<B7 G;8 NE@F 786<78 J;8G;8E GB 8AG8E G;8 <A7HFGEL 4A7 F8?? G;8 C4G8AG GB G;8 :<I8A CE<68
-;8E8 <F 9E88 8AGEL <AGB G;8 <A7HFGEL 4A7 G;8 ?84FG CEB7H6G<I8 NE@
GB 8AG8E 84EAF M8EB CEBNG <8 BA 4A <A7HFGEL ?8I8? G;8E8 4E8 786E84F<A:
E8GHEAF GB ?45BE -;8 NE@F G4>8 G;8 J4:8 E4G8 G;8 HA<G FH5F<7L E4G8 BA ?45BE 4A7 4F :<I8A 4A7 NE@F 8AG8E G;8 <A7HFGEL HAG<?
J;8E8 9B??BJF 9EB@ -;8 9E88 8AGEL 6BA7<G<BA :<I8A 5L 64A 58 FB?I87 9BE GB :8G G;8 ?45BE 78@4A7 <A G;8 + <A7HFGEL
9BE 4??
$! %!##&
-;8 FB6<4? C?4AA8E @4K<@<M8F G;8 FB6<4? FHEC?HF BI8E G;8 <ANA<G8
;BE<MBA 5L F8GG<A: G;8 FH5F<7L E4G8 <A 846; C8E<B7 -;8 FB6<4? FHEC?HF <F :<I8A 5L
J;8E8 <F G;8 CEB7H68E FHEC?HF 4A7 <F G;8 :BI8EA@8AG4? FHEC?HF J;<6; <F 4 6BFG 9BE G;8 :BI8EA@8AG <F :<I8A 5L G;8 7<F6BHAG87 I4?H8 B9 G;8 + FH5F<7<8F
J;8E8 <F G;8 7<F6BHAG E4G8 <8 G;8 <AG8E8FG E4G8 <F :<I8A 5L G;8 7<F6BHAG87 I4?H8 B9 G;8 CE<I4G8 + NE@FP CEBNGF
-;8 F86BA7 G8E@ <A 8DH4G<BA 8DH4?F 9EB@ 8DH4G<BA <@C?L<A:
G;4G G;8 CEB7H68EFP 8KGE4 E8I8AH8 9EB@ FH5F<7<8F 8DH4?F G;8 :BI8EA@8AG4?
6BFG B9 G;8 + FH5F<7<8F -;8A G;8 FB6<4? C?4AA8E CEB5?8@ <F E87H687 GB @4K<@<M<A: G;8 CE8F8AG I4?H8 B9 C4G8AG CEB7H6G<BA
4A7
-B FB?I8 G;<F C?4AA8E CEB5?8@ 4A4?LG<64??L GB NA7 G;8 BCG<@4? G<@8 CEBN?8 B9 G;8 FH5F<7L E4G8F CEBI8F GB 58 7<S6H?G 7H8 GB G;8 6B@C?8K<GL B9 G;8 7LA4@<6F <A G;8 CEB5?8@ +4G;8E J8 FB?I8 G;<F C?4AA8E CEB5?8@
5L AH@8E<64? F<@H?4G<BAF <A G;8 9B??BJ<A: F86G<BA
89BE8 J8 @BI8 BA GB F<@H?4G<BAF J8 <??HFGE4G8 5L 4 F<@C?8 8K4@C?8 G;4G G;8 F64?8 8?4FG<6<GL <F 6EH6<4? 9BE G;8 78I8?BC@8AG B9 G;8 >ABJ?87:8 FC<??BI8EF BI8E G<@8 BAF<78E G;8 HAE8:H?4G87 8DH<?<5E<H@ J;8E8 G;8E8 4E8 AB FH5F<7<8F <8 +84EE4A:<A: G;8 NEFG BE78E 6BA7<G<BA 9EB@
8DH4G<BA J;8A 4A7 HF<A: :<I8F G;8 CEB7H6G<BA B9 C4G8AGF <A G;8 HAE8:H?4G87 8DH<?<5E<H@ 4F 4 9HA6G<BA B9 G;8 >ABJ?87:8 FGB6>
4A7 G;8 C4E4@8G8EF 4A7
/8 F88 G;4G G;8 CEB7H6G<BA 9HA6G<BA <F ;B@B:8ABHF B9 78:E88
#9 G;8A G;8 CEB7H6G<BA 9HA6G<BA <F ;B@B:8ABHF B9 78:E88 <@C?L<A: 6BAFG4AG E8GHEAF GB >ABJ?87:8 BA CEB7H6G<BA <8 6BAFG4AG FC<??BI8EF BI8E G<@8 #9 G;8A G;8E8 <F 786E84F
<A: <A6E84F<A: E8GHEAF GB >ABJ?87:8 BA CEB7H6G<BA 4A7 G;8 FC<??BI8EF 786E84F8 <A6E84F8 BI8E G<@8
#AGH<G<BA 58;<A7 G;8 8T86G B9 G;8 F64?8 8?4FG<6<GL BA G;8 FC<??BI8EF 64A 58 :4<A87 5L ABG<6<A: G;4G G;8E8 4E8 GJB BCCBF<A: 8T86GF 9EB@ 4 ?4E:8E
>ABJ?87:8 FGB6> BA G;8 C4G8AG CEB7H6G<BA <EFG G;8 ?45BE <ACHG :EBJF 4F + CEB7H6G<I<GL <@CEBI8F J;8A G;8 >ABJ?87:8 FGB6> :EBJF -;<F 8T86G :<I8F G;4G G;8 C4G8AG CEB7H6G<BA <F <A6E84F<A: <A G;8 >ABJ?87:8 FGB6> ,86BA7 G;8E8 <F ?8FF CEB7H6G<I<GL :4<A 9EB@ A8J >ABJ?87:8 J;8A G;8 >ABJ?87:8 FGB6> <F ?4E:8 -;<F 8T86G :<I8F G;4G G;8 C4G8AG CEB7H6G<BA
<F 786E84F<A: <A G;8 >ABJ?87:8 FGB6> -;8 F64?8 8?4FG<6<GL 78G8E@<A8F J;<6; 8T86G <F 7B@<A4G<A: <A G;8 HAE8:H?4G87 8DH<?<5E<H@
-;4G G;8 F64?8 8?4FG<6<GL 78G8E@<A8F J;8G;8E G;8 FC<??BI8EF <A6E84F8 BE 786E84F8 BI8E G<@8 <A G;8 HAE8:H?4G87 8DH<?<5E<H@ @4L FH::8FG G;4G G;8 F64?8 8?4FG<6<GL <F 4?FB <@CBEG4AG 9BE G;8 G<@<A: B9 G;8 BCG<@4? FH5F<7<8F
"BJ8I8E F<A68 G;8 BCG<@4? FH5F<7<8F 78C8A7 BA G;8 >ABJ?87:8 FC<??BI8EF GB 4?? 9HGHE8 C8E<B7F 4A7 J8 64AABG 64?6H?4G8 ;BJ G;8 BCG<@4?
FH5F<7<8F 78I8?BC BI8E G<@8 -;HF J8 CEB6887 GB 4A4?LM8 G;8 BCG<@4?
FH5F<7<8F 5L AH@8E<64? F<@H?4G<BAF
)"&! #!-''
-B 6BA68AGE4G8 BA G;8 FC<??BI8EF 4A7 G;8 FH5F<7L CEBN?8F J8 4FFH@8 G;4G 4?? 8KB:8ABHF I4E<45?8F 4A7 C4E4@8G8EF 4E8 6BAFG4AG BI8E G<@8 -B @4>8 G;8 E8FH?GF 9B??BJ<A: 9EB@ 7<T8E8AG 6B@5<A4G<BAF B96B@C4E45?8 J8 47=HFG G;8 J4:8 E4G8 FB G;4G G;8 CEB7H6G<BA ?8I8? <A G;8 HAE8:H?4G87 8DH<?<5E<H@ <8 G;8 CEB7H6G<BA J;8A G;8E8 4E8 AB FH5F<7<8F <A G;8 NEFG C8E<B7 <F G;8 F4@8 <A 4?? F68A4E<BF -;8 AH@8E<64? FB?I8E F8GF G;8 FH5F<7L E4G8F 9BE 4?? G<@8 C8E<B7F F<@H?G4A8BHF?L 4A7 NA7F G;8 6B@5<A4G<BA B9 FH5F<7L E4G8F G;4G @4K<@<M8F G;8 FB6<4? FHEC?HF ,88 4CC8A7<K 9BE 4 C4E4@8G8E ?<FG
<EFG J8 EHA F68A4E<BF J;8E8 J8 F;BJ G;8 BCG<@4? FH5F<7L E4G8F 9BE 7<T8E8AG F64?8 CEBC8EG<8F -B @4>8 FHE8 G;4G G;8 E8FH?GF 9EB@ G;8 F<@H?4G<BA @B78? 4E8 ABG 4T86G87 5L <GF NA<G8 ;BE<MBA J8 ;4I8 EHA G;8
@B78? 9BE 7<T8E8AG ;BE<MBA ?8A:G;F ,<A68 G;8E8 4E8 AB FC<??BI8EF 49G8E G;8 ?4FG C8E<B7 B9 G;8 F<@H?4G<BAF G;8 BCG<@4? FH5F<7L E4G8F 4?J4LF :B GB M8EB 4G G;8 8A7 B9 G;8 ;BE<MBA FB J8 9B6HF BA G;8 FH5F<7L E4G8F <A G;8 84E?<8E C8E<B7F B9 G;8 F<@H?4G<BAF L I4EL<A: G;8 ;BE<MBA ?8A:G; J8 NA7 G;8 ?8A:G; B9 J;<6; G;8 F<@H?4G87 FH5F<7L E4G8F <A G;8 84E?L C8E<B7F 7B ABG 6;4A:8 #A N:HE8 G;8 FH5F<7L E4G8F 9BE GJB 7<T8E8AG ;BE<MBA
?8A:G;F J;8A G;8 F64?8 8?4FG<6<GL 8DH4?F BA8 4E8 F88A
,88 4CC8A7<K 9BE G;8 C4E4@8G8E I4?H8F HF87 <A G;8 N:HE8F
<:HE8
Scale elasticity equal to one
0 1 2 3 4 5
1 20 39 58 77 96 115 134
Time
Subsidy rate T=125
T=150
-;8 FH5F<7L CEBN?8F <A G;8 NEFG C8E<B7F 4E8 4CCEBK<@4G8?L HA4?
G8E87 J;8A G;8 AH@58E B9 F<@H?4G<BA C8E<B7F 8K6887F FH::8FG<A:
G;4G G;8 NEFG C8E<B7F @<@<6F G;8 FB?HG<BA GB G;8 <ANA<G8 ;BE<MBA CEB5
?8@ ,<A68 J8 4E8 <AG8E8FG87 <A G;8 FB?HG<BAF GB G;8 <ANA<G8 CEB5?8@
J8 BA?L FGH7L G;8 NEFG C8E<B7F B9 G;8 F<@H?4G<BAF -;8 FH5F<7L E4G8
<F 4CCEBK<@4G8?L 6BAFG4AG <A G;8 NEFG C8E<B7F <@C?L<A: G;4G 4 F64?8 8?4FG<6<GL 8DH4? GB BA8 <F FHS6<8AG 9BE 6BAFG4AG FH5F<7<8F /8 ;4I8 EHA G;8 F<@H?4G<BA @B78? 9BE 7<T8E8AG C4E4@8G8E I4?H8F <A G;8 64F8 B9 4 F64?8 8?4FG<6<GL 8DH4? GB BA8 4A7 G;8 FH5F<7L CEBN?8F 4E8 4?J4LF 6BAFG4AG -;<F FH::8FGF G;4G G;8 FC<??BI8EF <A BCG<@H@ 9B??BJF G;8 F4@8 7LA4@<6F 4F G;8 FC<??BI8EF <A G;8 HAE8:H?4G87 8DH<?<5E<H@ FB G;4G G;8 GJB BCCBF
<A: 8T86GF B9 <A6E84F<A: >ABJ?87:8 FGB6> <A6E84F<A: ?45BE <ACHG 7H8 GB
;<:;8E ?45BE CEB7H6G<I<GL 4A7 ?8FF CEB7H6G<I<GL :4<A 9EB@ A8J >ABJ?87:8 J;8A G;8 >ABJ?87:8 FGB6> <F ?4E:8 =HFG BTF8G 846; BG;8E J;8A G;8 F64?8 8?4FG<6<GL 8DH4?F BA8
<:HE8 4A7 N:HE8 F;BJ G;8 BCG<@4? FH5F<7L E4G8F G;8 NEFG C8E<B7F B9 G;8 F<@H?4G<BAF 9BE F64?8 8?4FG<6<G<8F <A G;8 + CEB7H6G<BA 9HA6G<BA ?4E:8E 4A7 ?BJ8E G;4A BA8
<:HE8
Scale elasticity larger than one
10,1 10,2 10,3 10,4 10,5 10,6 10,7
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Time
Subsidy rate
<:HE8
Scale elasticity lower than one
2 2,02 2,04 2,06 2,08 2,1 2,12 2,14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Time
Subsidy rate
<:HE8 4A7 N:HE8 F;BJ G;4G G;8 BCG<@4? FH5F<7L E4G8 <F <A6E84F<A:
J;8A G;8 F64?8 8?4FG<6<GL <A G;8 + CEB7H6G<BA 9HA6G<BA <F ?4E:8E G;4A BA8 4A7 G;4G G;8 BCG<@4? FH5F<7L E4G8 <F 786E84F<A: J;8A G;8 F64?8 8?4F G<6<GL <F ?BJ8E G;4A BA8 -;8 F<@H?4G<BAF FH::8FG G;4G G;8 @86;4A<F@F 9EB@ G;8 F<@C?<N87 8K4@C?8 J<G; AB FH5F<7<8F 4CC?L GB G;8 BCG<@4? FB?H G<BAF J<G; FH5F<7<8F 4F J8?? -;8 <AGH<G<BA 58;<A7 G;<F E8FH?G 9B??BJF 9EB@
G;4G G;8 F64?8 8?4FG<6<GL 78G8E@<A8F G;8 >ABJ?87:8 FC<??BI8EF G;EBH:; G;8 GJB BCCBF<A: 8T86GF @8AG<BA87 45BI8 <EFG G;8 FC<??BI8EF 4E8 <A6E84F<A:
<A G;8 >ABJ?87:8 FGB6> 5864HF8 G;8 ?45BE <ACHG <F ?4E:8 <A ?4G8 C8E<B7F 7H8 GB ;<:; @4E:<A4? ?45BE CEB7H6G<I<GL ,86BA7 G;8 FC<??BI8EF 4E8 786?<A<A:
<A G;8 >ABJ?87:8 FGB6> 5864HF8 G;8E8 <F ?8FF CEB7H6G<I<GL :4<A 9EB@ A8J
>ABJ?87:8 J;8A G;8 FGB6> <F ?4E:8 -;8F8 F<@H?4G<BAF 7B ABG CEBI8 G;8 E8?4G<BA 58GJ88A G;8 F64?8 8?4FG<6<GL 4A7 G;8 FH5F<7L E4G8 CEBN?8 "BJ 8I8E J8 ;4I8 G8FG87 9BE 7<T8E8AG C4E4@8G8E I4?H8F 4A7 4?? F<@H?4G<BAF :<I8 G;8 F4@8 E8FH?GF J<G; E8FC86G GB G;8 F64?8 8?4FG<6<GL 4A7 G;8 G<@8 CEBN?8 B9 G;8 FH5F<7L E4G8
?FB 9BE G;8F8 F68A4E<BF J8 ;4I8 EHA F8I8E4? F8AF<G<I<GL 4A4?LF8F I4EL
<A: G;8 I4?H8F B9 G;8 7<T8E8AG C4E4@8G8EF -;8 E8FH?GF ;4I8 F;BJA EB5HFG GB G;8F8 G8FGF
,(#'$#'
#A G;8 9B??BJ<A: J8 7B F8C4E4G8 8KG8AF<BAF 4A7 FGH7L ;BJ G;8F8 4T86G G;8 BCG<@4? FH5F<7L E4G8F <EFG J8 <AGEB7H68 4 6BAFGE4<AG BA G;8 FH5F<7L 4@BHAGF -;8A 78CE86<4G<BA B9 >ABJ?87:8 <F <AGEB7H687 <AGB G;8 @B78?
@4><A: ABA<A6E84F<A: >ABJ?87:8 FGB6>F CBFF<5?8 <A4??L J8 <AGEB7H68 8A7B:8ABHF J4:8F <AGB G;8 @B78?
$*&#"#(! )( $#'(&#(
!BI8EA@8AG4? FH5F<7<M4G<BA ;4F GB 58 NA4A687 5L G4K8F -B E8CE8F8AG G;8 6BFGF B9 G4K4G<BA J8 <AGEB7H68 4 6BAFGE4<AG GB G;8 FH5F<7L 4@BHAGF FB G;4G G;8 FB6<4? C?4AA8E ;4F GB 786<78 58GJ88A FH5F<7<M<A: ABJ 4A7 FH5F<7<M<A: ?4G8E /8 FGH7L G;8 64F8 B9 4 :BI8EA@8AG4? 5H7:8G 6BA FGE4<AG 5L F<@H?4G<A: G;8 CE8I<BHF F68A4E<BF J<G; <A6E84F<A: >ABJ?87:8 FGB6>F 4A7 6BAFGE4<A<A: G;8 CE8F8AG I4?H8F B9 G;8 FH5F<7<8F GB 8DH4?
B9 G;8 CE8F8AG I4?H8F B9 G;8 6BEE8FCBA7<A: HA6BAFGE4<A87 F68A4E<BF -;8 F<@H?4G87 FH5F<7L CEBN?8F 4E8 HA4?G8E87 J;8A <AGEB7H6<A: 4 5H7 :8G 6BAFGE4<AG BA G;8 FH5F<7<8F <@C?L<A: G;4G G;8 :BI8EA@8AG4? 5H7:8G 6BAFGE4<AG BA?L ;4F 4 ?8I8? 8T86G 4A7 ABG 4 CEBN?8 8T86G BA G;8 FH5F<7L E4G8F
$##&'# #$+! '($
#9 BA8 <AG8ECE8GF G;8 >ABJ?87:8 FGB6> <A BHE @B78? 4F BA?L G;8 >ABJ?87:8 G;4G <F 6BAGE<5HG<A: 7<E86G?L GB G;8 CEB7H6G<BA CEB68FF 4 ABA<A6E84F<A:
>ABJ?87:8 FGB6> @<:;G ABG 58 HAE84?<FG<6 -B 4??BJ 9BE G;<F J8 8KC4A7 BHE AH@8E<64? @B78? GB <A6?H78 78CE86<4G<BA B9 >ABJ?87:8 E8CE8F8AG87 5L 4 6BAFG4AG 78CE86<4G<BA E4G8 -;8 9HA6G<BA 9BE G;8 >ABJ?87:8 FGB6>
<F HC74G87 GB
FB G;4G
J;8E8 <F G;8 78CE86<4G<BA E4G8 -;8 F<@H?4G87 FH5F<7L E4G8F 4E8 6BA FG4AG BI8E G<@8 9BE 4?? F64?8 8?4FG<6<G<8F <9 G;8 78CE86<4G<BA E4G8 >88CF G;8
>ABJ?87:8 FGB6> 6BAFG4AG BI8E G<@8 -;8 <AGH<G<BA <F G;4G G;8 86BAB@<6 8AI<EBA@8AG <F G;8 F4@8 9BE 4?? C8E<B7F J;8A G;8 >ABJ?87:8 FGB6> <F 6BA FG4AG <8 J<G;BHG FH5F<7<8F G;8 CE<I4G8 NE@F CEB7H68 G;8 F4@8 BHGCHG
<A 4?? C8E<B7F -;<F <@C?<8F G;4G G;8 HA78EFHCC?L B9 + <F G;8 F4@8 <A 4?? C8E<B7F -;HF G;8 BCG<@4? FH5F<7L E4G8 <F 6BAFG4AG
#A G;8 786E84F<A: >ABJ?87:8 FGB6> F68A4E<B G;8 6BAA86G<BA 58GJ88A G;8 FH5F<7L E4G8F 4A7 G;8 F64?8 8?4FG<6<GL <F E8I8EF87 9EB@ G;8 F68A4E<B J<G; 4A <A6E84F<A: >ABJ?87:8 FGB6> -;8 E84FBA <F G;4G G;8 7LA4@<6F B9 G;8 FB6<4? C?4AA8EPF @4K<@<M4G<BA CEB5?8@ <F E8I8EF87 J;8A G;8 >ABJ?
87:8 FGB6> 786E84F8F BI8E G<@8 6B@C4E87 GB J;8A G;8 >ABJ?87:8 FGB6>
<F <A6E84F<A: "8A68 G;8 FH5F<7L CEBN?8F <A G;8 F68A4E<B J<G; 4 786E84F
<A: >ABJ?87:8 FGB6> 4E8 E8I8EF87 9EB@ G;8 F68A4E<B J<G; 4A <A6E84F<A:
>ABJ?87:8 FGB6> -;8 E8FH?GF FG4A7 9BE 4?? G;8 C4E4@8G8E I4?H8F J8 ;4I8 G8FG87 9BE
#$#$)' + &('
6BAFG4AG J4:8 <A G;8 + <A7HFGEL J;<6; J8 ;4I8 4FFH@87 @4L 58 4 E84FBA45?8 4CCEBK<@4G<BA <9 G;8 + <A7HFGEL 6BAFG<GHG8F 4 F@4?? C4EG B9 G;8 GBG4? 86BAB@L "BJ8I8E <9 +PF F;4E8 B9 ?45BE :8GF ?4E:8 + J4:8F ;4I8 GB <A6E84F8 E8?4G<I8?L @BE8 G;4A BG;8E <A7HFGE<8F GB 4GGE46G JBE>8EF -;8 F<@H?4G<BAF 4E8 E8C84G87 J<G; G;8 9B??BJ<A: J4:8 8DH4G<BA GB 4??BJ 9BE 8A7B:8ABHF J4:8F
J;8E8 4A7 4E8 54F8 L84E I4?H8F 9BE ?45BE 4A7 J4:8 <A G;8 +
<A7HFGEL 4A7 4E8 G;8 6BEE8FCBA7<A: 6HEE8AG I4?H8F 4A7 <F G;8 F64?8 8?4FG<6<GL <A 4A BHGF<78 <A7HFGEL G;4G HF8 ?45BE 9EB@ G;8 F4@8 CBB?
4F G;8 + <A7HFGEL #9 G;8 8?4FG<6<GL B9 F64?8 <A G;8 BHGF<78 <A7HFGEL 8DH4?F <8 G;8E8 <F AB 8KGE4 6BFGF B9 HF<A: @BE8 ?45BE <A G;8 + <A7HFGEL FB J8 :8G G;8 F4@8 6BAFG4AG J4:8 4F 589BE8 -;8 E84FBA <F G;4G 6BAFG4AG E8GHEAF GB F64?8 <A G;8 BHGF<78 <A7HFGEL <@C?<8F 4 6BAFG4AG
@4E:<A4? CEB7H6G B9 ?45BE '*& <A G;4G <A7HFGEL
#9 G;8E8 4E8 786E84F<A: E8GHEAF GB F64?8 <A G;8 BHGF<78 <A7HFGEL <8 G;8 '*& <A6E84F8F 9BE G;8 BHGF<78 <A7HFGEL 4F @BE8 ?45BE <F 4??B64G87 GB + 4A7 G;8 J4:8 E4G8 <A6E84F8F ,<@H?4G<BAF 9BE :<I8F 5BG; ?BJ8E BCG<@4? FH5F<7<8F 4A7 BCG<@4? FH5F<7<8F G;4G 4E8 @BE8 786E84F<A: 9BE 4?? F64?8 8?4FG<6<G<8F -;<F @84AF G;4G 4 F64?8 8?4FG<6<GL 8DH4? GB BA8 AB ?BA:8E <F G;8 G;E8F;B?7 9BE J;8A G;8 G<@8 CEBN?8 B9 G;8 BCG<@4? FH5F<7L E4G8 6;4A:8F 9EB@ <A6E84F<A: GB 94??<A: <8 <G <F CBFF<5?8 GB :8G 94??<A: FH5F<7<8F J;8G;8E G;8 F64?8 8?4FG<6<GL <F ?BJ8E 8DH4? BE
?4E:8E G;4A #A BG;8E JBE7F G;8 G;E8F;B?7 9BE J;8A G;8 FH5F<7L CEBN?8 6;4A:8 F<:A 9EB@ <A6E84F<A: GB 94??<A: <F ;<:;8E G;8 @BE8 G;8 J4:8 GB
-B F88 G;<F ABG8 G;4G G;8 @4K<@<M4G<BA CEB5?8@ :<I8A 5L<F G;8 F4@8 <9 J8 FG4EG 9EB@ C8E<B74F <9 J8 FG4EG 9EB@ C8E<B7 J;8A<F 6BAFG4AG
+ <A6E84F8F -;8 <AGH<G<BA <F G;4G ;<:;8E J4:8F 7H8 GB :EBJ<A: ?45BE
<ACHG <A G;8 + <A7HFGEL E87H68 G;8 8KC4AF<BA B9 ?45BE <AGB E8F84E6;
<A 9HGHE8 C8E<B7F 9B??BJ<A: 9EB@ <A6E84F87 CEB7H6G<I<GL -;<F 6BAGE<5HG8F GB ?BJ8E G;8 <A6E84F8 <A CEB7H6G<BA <A 9HGHE8 C8E<B7F 4A7 G;HF E87H68 G;8 >ABJ?87:8 FC<??BI8EF
$#!)'$#
"BJ :BI8EA@8AGF F;BH?7 8A:4:8 <A CB?<6<8F GB FCHE + 46G<I<GL 9EB@
CE<I4G8 NE@F <F 4A <@CBEG4AG CB?<6L DH8FG<BA F<A68 G;8 E8F84E6; @4E>8GF 4E8 E<77?87 J<G; <A8S6<8A6<8F #A G;<F C4C8E J8 8KC?BE8 ;BJ BA8 B9 G;8F8 <A8S6<8A6<8F 8KG8EA4?<G<8F 9EB@ >ABJ?87:8 FC<??BI8EF 4T86GF G;8 7<FGE<5HG<BA B9 CB?<6L <A68AG<I8F 46EBFF G<@8
/8 NA7 G;4G G;8 G<@8 CEBN?8 B9 G;8 BCG<@4? FH5F<7L E4G8F GB +
<F 78G8E@<A87 5L G;8 8?4FG<6<GL B9 F64?8 <A G;8 + CEB7H6G<BA 9HA6G<BA A 8?4FG<6<GL B9 F64?8 ?4E:8E G;4A BA8 <@C?<8F <A6E84F<A: BCG<@4? FH5F<7L E4G8F J;<?8 4A 8?4FG<6<GL B9 F64?8 F@4??8E G;4A BA8 <@C?<8F 94??<A: BCG<@4?
FH5F<7<8F HEG;8E 6BAFG4AG FH5F<7L E4G8F BI8E G<@8 4E8 BCG<@4? BA?L <9 G;8 8?4FG<6<GL B9 F64?8 <F 8DH4? GB BA8
-;8 <AGH<G<BA 58;<A7 G;<F E8FH?G <F G;4G G;8 F64?8 8?4FG<6<GL 78G8E
@<A8F G;8 >ABJ?87:8 FC<??BI8EF G;EBH:; GJB BCCBF<A: 8T86GF <EFG G;8 FC<??BI8EF 4E8 <A6E84F<A: <A G;8 >ABJ?87:8 FGB6> 5864HF8 G;8 ?45BE <A CHG <F ?4E:8 <A ?4G8 C8E<B7F 7H8 GB ;<:; ?45BE CEB7H6G<I<GL ,86BA7 G;8 FC<??BI8EF 4E8 786?<A<A: <A G;8 >ABJ?87:8 FGB6> 5864HF8 G;8E8 <F ?8FF CEB 7H6G<I<GL :4<A 9EB@ A8J >ABJ?87:8 J;8A G;8 FGB6> <F ?4E:8
/8 4?FB 6BAF<78E 4 F86BA7 58FG 64F8 J<G; 4 ?<@<G87 :BI8EA@8AG4?
5H7:8G 9BE + FH5F<7<8F -;8 5H7:8G 6BAFGE4<AG ;4F AB 8T86G BA G;8 G<@8 CEBN?8 B9 G;8 BCG<@4? FH5F<7L E4G8F BA?L 4 ?8I8? 8T86G
"BJ8I8E <9 G;8 + <A7HFGEL <F ?4E:8 E8?4G<I8 GB G;8 E8FG B9 G;8 86BAB@L <A6E84F<A: J4:8F @4L E87H68 >ABJ?87:8 FC<??BI8EF 4A7 @4>8 G;8 G<@8 CEBN?8 B9 G;8 BCG<@4? FH5F<7L E4G8F @BE8 94??<A: 9BE :<I8A 8?4F G<6<GL B9 F64?8
-;8 F<M8 B9 G;8 BHGCHG 8?4FG<6<GL C4E4@8G8EF <F 4A 8@C<E<64? DH8FG<BA -;8E8 4E8 FB@8 FGH7<8F G;4G 8FG<@4G8 G;8 C4E4@8G8EF <A G;8 4::E8:4G8 + CEB7H6G<BA 9HA6G<BA BG; *BEG8E 4A7 ,G8EA 4A7 *8FFB4 NA7 4 F64?8 8?4FG<6<GL ?4E:8E G;4A BA8 #A 4ABG;8E FGH7L !BA: 8G 4? NA7 4 F64?8 8?4FG<6<GL F@4??8E G;4A BA8 G;BH:; G;8 E8FH?GF 4E8 ABG F<:A<N64AG ABG;8E 4CCEB46; <F $BA8F 4A7 /<??<4@F J;8E8 G;8 64?<5E4G87 E4A:8F B9 BHGCHG 8?4FG<6<G<8F 4?? :<I8 4A 8?4FG<6<GL B9 F64?8
?4E:8E G;4A BA8 HEG;8E 8@C<E<64? E8F84E6; <F A88787 GB 8FG45?<F; G;8 F<:A<N64AG E4A:8F 9BE G;8 BHGCHG 8?4FG<6<G<8F
#A G;<F C4C8E J8 ;4I8 BA?L <A6?H787 BA8 8KG8EA4?<GL <A G;8 E8F84E6;
@4E>8G )G;8E 8KG8EA4?<G<8F 8: @BABCB?L CE<M<A: 6E84G<I8 78FGEH6G<BA
4A7 E8F84E6; 6BA:8FG<BA @4L 4?FB <AOH8A68 G;8 BCG<@4? G<@8 CEBN?8 B9 FH5F<7<8F -;<F <F 4 I8AH8 9BE 9HGHE8 E8F84E6;
&#'
23 57<; 0 4A7 $BHGM +8?4G<A: G;8 >ABJ?87:8 CEB7H6G<BA 9HA6G<BA GB GBG4? 946GBE CEB7H6G<I<GL 4A 8A7B:8ABHF :EBJG; CHMM?8
#' /BE><A: C4C8E
23 :;<BA * "BJ<GG * @B78? B9 86BAB@<6 :EBJG; G;EBH:;
6E84G<I8 78FGEH6G<BA 6BAB@8GE<64
23 !8E?4:; + %I8EA7B>> , 4A7 +BF8A74;? % &<A><A:
AI<EBA@8AG4? 4A7 #AABI4G<BA *B?<6L ' /BE><A: *4C8EF 23 !8E?4:; + %I8EA7B>> , 4A7 +BF8A74;? % )CG< '
@4? -<@<A: B9 ?<@4G8 ;4A:8 *B?<6L AI<EBA@8AG4? 4A7 +8FBHE68 6BAB@<6F
23 !BA: ! !E8<A8E 4A7 ,8@@?8E / A7B:8ABHF
!EBJG; FG<@4G<A: G;8 +B@8E 'B78? 9BE G;8 ., 4A7 !8E@4AL )K9BE7 H??8G<A B9 6BAB@<6F 4A7 ,G4G<FG<6F
23 !E<?<6;8F 1 + 4A7 *EB7H6G<I<GL 6BAB@8GE<6 +8FH?GF 4A7 '84FHE8@8AG #FFH8F <A "4A75BB> B9 G;8 6BAB@<6F B9 #AABI4 G<BA 4A7 -86;A<64? ;4A:8 * ,GBA8@4A 7 ?46>J8?? )K9BE7 23 "8::874? -+ )A + 4A7 G;8 HA78EFHCC?L B9 8@8E:<A:
I8EFHF @4GHE8 G86;AB?B:<8F <F6HFF<BA *4C8E ,G4G<FG<6F (BE 23 "8::874? -+ 4A7 $46B5F8A % -<@<A: B9 <AABI4G<BA CB?<J4L 6<8F J;8A 64E5BA 8@<FF<BAF 4E8 E8FGE<6G87 A 4CC?<87 :8A8E4? 8DH<
?<5E<H@ 4A4?LF<F <F6HFF<BA *4C8E ,G4G<FG<6F (BEJ4L
23 $BA8F # + 54F87 @B78?F B9 86BAB@<6 :EBJG; $BHEA4?
B9 *B?<G<64? 6BAB@L
23 $BA8F # !EBJG; /<G; BE /<G;BHG ,64?8 T86GF -;8
@8E<64A 6BAB@<6 +8I<8J
23 $BA8F # 4A7 /<??<4@F $ -BB 'H6; B9 4 !BB7 -;<A:
-;8 6BAB@<6F B9 #AI8FG@8AG <A + $BHEA4? B9 6BAB@<6 !EBJG;
23 %?8GG8 -$ 'U8A $ 4A7 !E<?<6;8F 1 B FH5F<7<8F GB 6B@@8E6<4? + E87H68 @4E>8G 94<?HE8F '<6EB86BAB@8GE<6 8I4?H 4G<BA FGH7<8F +8F84E6; *B?<6L
23 %I8EA7B>> , 4A7 +BF8A74;? % ?<@4G8 CB?<6<8F 4A7
?84EA<A: 5L 7B<A: #@C46GF 4A7 G<@<A: B9 G86;AB?B:L FH5F<7<8F +8 FBHE68 4A7 A8E:L 6BAB@<6F
23 *8E8M,854FG<4A *H5?<6 FHCCBEG GB <AABI4G<BA 4A7 <@<
G4G<BA <A 4 ABAF64?8 :EBJG; @B78? $BHEA4? B9 6BAB@<6 LA4@<6F
BAGEB?
23 *8FFB4 R#784FR 7E<I8A :EBJG; G;8 ) 8I<78A68
*BEGH:H8F8 6BAB@<6 $BHEA4?
23 *BEG8E ' 4A7 ,G8EA , '84FHE<A: G;8 Q<784FR CEB7H6 G<BA 9HA6G<BA I<78A68 9EB@ <AG8EA4G<BA4? C4G8AG BHGCHG /BE><A:
C4C8E (4G<BA4? HE84H B9 6BAB@<6 +8F84E6;
23 +B@8E * A7B:8ABHF -86;AB?B:<64? ;4A:8 $BHEA4? B9
*B?<G<64? 6BAB@L
23 ,4@4A<8:B +' + 4A7 :EBJG; -;8 @<FF<A: ?<A>
'46EB86BAB@<6 LA4@<6F
%%#, &"(& !'(
-;8 9B??BJ<A: I4?H8F J8E8 HF87 <A 4?? F<@H?4G<BAF
..AE8:H?4G87 8DH<?<5E<H@
-;8 G45?8F 58?BJ F;BJ G;8 7<T8E8AG C4E4@8G8E I4?H8F 9BE 4A7 G;4G J8E8 F<@H?4G87 -;8 I4?H8F @4E>87 J<G; 4E8 G;8 I4?H8F HF87 <A G;8 N:HE8F
,64?8 8?4FG<6<GL
,64?8 8?4FG<6<GL
,64?8 8?4FG<6<GL
