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When Does Funding Research By Smaller Firms Bear Fruit?: Evidence From The Sbir Program

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Author Info
JOSHUA GANS
SCOTT STERN

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Abstract

This paper evaluates whether the relative concentration of funding for small, research-oriented firms in a small number of high-technology industries is related to differences across industries in the appropriability level facing small firms. We exploit a novel test based on the relationship between industry-level private venture financing and the performance of government-subsidized R&D projects. If industries differ in their appropriability level, then private funding and subsidized project performance should be positively correlated. Our principal finding is that subsidized project performance is higher in industrial segments with higher rates of private venture capital investment. Industrial sectors therefore seem to differ in the degree of appropriability and this variation helps explain why venture capital is concentrated. * The latest version of this paper is available at http://www.mbs.edu/home//jgans/research.htm

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 12 (2003)
Issue (Month): 4 (August)
Pages: 361-384
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Handle: RePEc:taf:ecinnt:v:12:y:2003:i:4:p:361-384

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Related research
Keywords: Innovation; Appropriability; Subsidy; Capital Constraints; Technological Opportunity; Venture Capital;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Diego Rodriguez Palenzuela, 2001. "Sources of economic renewal - from the traditional firm to the knowledge firm," Working Paper Series 43, European Central Bank. [Downloadable!]
  2. Ari Hyytinen & Mika Pajarinen, 2002. "Financing of Technology-Intensive Small Business: Some Evidence on the Uniqueness of the ICT Industry," Discussion Papers 813, The Research Institute of the Finnish Economy. [Downloadable!]
  3. Toole, Andrew A. & Czarnitzki, Dirk, 2005. "Biomedical Academic Entrepreneurship Through the SBIR Program," ZEW Discussion Papers 05-47, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  4. Andrew A. Toole & Dirk Czarnitzki, 2005. "Biomedical Academic Entrepreneurship Through the SBIR Program," NBER Working Papers 11450, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Marco Da Rin & Giovanna Nicodano & Alessandro Sembenelli, 2004. "Public Policy and the Creation of Active Venture Capital Markets," Working Papers 270, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  6. Ari Hyytinen & Mika Pajarinen, 2001. "Financial Systems and Venture Capital in Nordic Countries: A comparative Study," Discussion Papers 774, The Research Institute of the Finnish Economy. [Downloadable!]
  7. Jyrki Ali-Yrkkö & Ari Hyytinen & Johanna Liukkonen, 2001. "Exiting Venture Capital Investments: Lessons from Finland," Discussion Papers 781, The Research Institute of the Finnish Economy. [Downloadable!]
  8. Joshua S. Gans & David H. Hsu & Scott Stern, 2000. "When Does Start-Up Innovation Spur the Gale of Creative Destruction?," NBER Working Papers 7851, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Müller, Elisabeth & MacGarvie, Megan & Cockburn, Iain, 2008. "Patent Thickets, Licensing and Innovative Performance," ZEW Discussion Papers 08-101, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  10. Ari Hyytinen & Mika Pajarinen, 2002. "Small Business Finance in Finland. A Descriptive Study," Discussion Papers 812, The Research Institute of the Finnish Economy. [Downloadable!]
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