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Strategic interactions in public R&D across EU-15 countries : A spatial econometric analysis

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  • Hakim Hammadou

    (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille 1 - Sciences et Technologies)

  • Sonia Paty

    (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)

  • Maria Savona

    (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS : UMR8019 - Université Lille 1 - Sciences et Technologies, SPRU - Science and Technology Policy Research - University of Sussex)

Abstract

The aim of this paper is to test the presence of strategic interactions in government spending on Research and Development (R&D), among EU-15 countries. We add to the literature on public choice strategic interactions in general, and to work on R&D spending in particular. We take account of traditional and some rather overlooked factors related to countries' public R&D spending, including (i) the international context - i.e. Lisbon strategy ; (ii) country characteristics - the National System of Innovation ; (iii) national similarities in relation to (a) trade and economic size and (b) sectoral specialization. Sectoral specialization is likely to affect government spending, depending on the mechanisms of complementarity or substitution between public and private R&D. Using a dynamic spatial panel model in which spatial matrices are specified in terms of traditional Euclidean distance, and sectoral specialization proximity, we confirm the existence of strategic interactions in relation to R&D spending among European countries with similar economic, international trade and sectoral structure perspectives. Unlike the results for strategic interactions in public choice, geographic proximity seems not to affect interactions related to public spending on R&D.

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Paper provided by HAL in its series Working Papers with number halshs-00727362.

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Date of creation: 03 Sep 2012
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Handle: RePEc:hal:wpaper:halshs-00727362

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Keywords: Public R&D expenditures ; National Systems of Innovation ; complementarity public and private R&D ; spatial interactions ; EU countries ; spatial dynamic panel data;

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