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Public Subsidies to Business R&D: Do They Stimulate Private Expenditures?

Author

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  • María Callejón

    (Department of Economic Policy, University of Barcelona, Av/Diagonal, 690.08034 Barcelona, Spain)

  • José García-Quevedo

    (Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Av/Diagonal, 690.08034 Barcelona, Spain)

Abstract

The purpose of this paper is to obtain new evidence about a fundamental question of empirical studies on technology policy. Is public R&D a complement to or a substitute for private R&D? We examine, at an industry level, the relationship between private R&D expenditures and public subsidies in Spain, using panel data and controlling the interindustry differences in technological opportunities. The results suggest that public subsidies have complemented private R&D. This is an interesting result because technology policy was reoriented in the 1990s with a reduction of direct government subsidies for R&D and an increase in tax incentives.

Suggested Citation

  • María Callejón & José García-Quevedo, 2005. "Public Subsidies to Business R&D: Do They Stimulate Private Expenditures?," Environment and Planning C, , vol. 23(2), pages 279-293, April.
    • Handle: RePEc:sae:envirc:v:23:y:2005:i:2:p:279-293
    DOI: 10.1068/c0428
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    References listed on IDEAS

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    1. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
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    Cited by:

    1. Yang, Bofei & Zhu, Shengjun, 2022. "Public funds in high-tech industries: A blessing or a curse," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    2. Simachev, Y. & Kuzyk, M. & Zudin, N., 2017. "The Impact of Public Funding and Tax Incentives on Russian Firms: Additionality Effects Evaluation," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 59-93.

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