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Fostering innovative business investment in Spain

Author

Listed:
  • David Haugh

    (OECD)

  • Müge Adalet McGowan

    (OECD)

  • Dan Andrews

    (OECD)

  • Aida Caldera Sánchez

    (OECD)

  • Gabor Fulop

    (OECD)

  • Pilar Garcia Perea

    (OECD)

Abstract

Spain has chronically low productivity growth, which undermines its ability to generate higher living standards. Important contributors to low productivity growth are the misallocation of capital to low productivity firms and under-investment in knowledge-based capital. To foster a better allocation of capital a first priority is to better tune bank, capital market and government financing to the needs of new innovative firms. This could be done through better small and medium-sized enterprises (SMEs) bond and loan securitisation tools, reallocating public financing to early stage finance and making it easier for firms to access public innovation funding by shifting some funding from loans to grants for research and development (R&D) projects. Attracting more foreign capital and improving the regulatory framework to increase the return on investment would also help. This could be done by reducing regulatory barriers that hold back competition, improving the neutrality of the tax system, improving pricing signals and reforming insolvency laws.

Suggested Citation

  • David Haugh & Müge Adalet McGowan & Dan Andrews & Aida Caldera Sánchez & Gabor Fulop & Pilar Garcia Perea, 2017. "Fostering innovative business investment in Spain," OECD Economics Department Working Papers 1387, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1387-en
    DOI: 10.1787/f957c2cc-en
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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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