【IEF Seminar 34】A.P. Yu Chen: Government Intervention, Innovation, and Entrepreneurship


EFIT Yukun Huang

On the afternoon of September 11, Chen yu, an assistant professor of economics at the university of Graz in Austria, delivered a lecture titled " Government Intervention, Innovation, and Entrepreneurship " at Weiyu Building 117. Teachers and some students from the institution participated in the lecture and subsequent discussion.

The lecture begins with an introduction to research motivation. Teamwork is very important in today's entrepreneurship. There has also been a lot of debate about how government intervention can improve innovation. In this article, professor Chen Yu mainly considers two kinds of government intervention: indirect intervention and hybrid intervention. Hybrid intervention is when the government acts as both a referee and an athlete. TSMC, a semiconductor giant, is a prime example of hybrid government intervention.

The main feature and contribution of this article is the introduction of both government subsidies and budget constraints for government intervention. After that, professor Chen Yu introduced the construction of the model. Under this model, three kinds of situations were studied respectively, including the benchmark without intervention, indirect intervention and hybrid intervention.

Finally, the professor introduced the main results of this article. Indirect government intervention can usually raise the level of effort and boost social surplus. On the contrast, hybrid government interventions do not always have that effect. In addition, government subsidies and incentives also provide positive incentives to enterprises.