The Impact of Public R&D Expenditure on Business R&D: Russia and OECD Countries

This chapter is based on the work of Dominique Guellec and Bruno van Pottelsberghe (2000), in which they had estimated the aggregate net effect of public research, government funding of business-performed R&D, and fiscal policy on business R&D in 17 OECD Member countries over the last two decades of XX century. Based on their methodology we have made similar estimations for OECD Member countries and Russia including the first decade of XXI century and compared results. We used the dynamic specification of the fixed effect model to distinguish short-run from long-run elasticities of business-funded R&D with respect to output and the policy instruments. It is shown that the short-term impact of the government policy instruments has decreased due to financial crises for OECD countries. The long-term elasticity of business-funded R&D with respect to direct government funding of R&D performed by business has increased however, which points out the importance of government long-term support for business performance. The short-run elasticity of business-funded R&D with respect to output has decreased more sharply than long-run which is also can be the result of financial crises. For Russia the significant effect of the considered government instruments on business performance hasn’t been found.