Matthew effects and R&D subsidies: knowledge cumulability in high-tech and low-tech industries
AbstractThe paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms in high-tech and low-tech industries. It applies the distinction between virtuous Matthew-effects and vicious Matthew-effects. The former qualifies the persistence in the discretionary allocation of public subsidies in terms of sheer reputation based upon previous awards. The latter is identified by the role of the accumulation of competence stemming from past grants in current R&D activities. Virtuous Matthew effects are found in high-tech industries where knowledge cumulability is higher. In traditional industries, vicious Matthew effects prevail for the lower levels of knowledge cumulability. Here reputation-Matthew-effects can lead to substitution of private funds with public ones. The empirical analysis is based on Transition Probability Matrices, probit regressions and Propensity Score Matching on around 700 Italian firms in the years 1998-2003.
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Bibliographic InfoPaper provided by Department of Economics - University Roma Tre in its series Departmental Working Papers of Economics - University 'Roma Tre' with number 0140.
Date of creation: Oct 2011
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Innovation; R&D subsidies; Matthew effects; past dependence; path dependence;
Other versions of this item:
- Cristiano Antonelli & Francesco Crespi, 2012. "Matthew Effects And R&D Subsidies: Knowledge Cumulability In High-Tech And Low-Tech Industries," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 71(1), pages 5-31, October.
- Antonelli Cristiano & Crespi Francesco, 2011. "Matthew effects and R&D subsidues: knowledge cumulability in high-tech and low-tech industries," Dipartimento di Economia "S. Cognetti de Martiis" LEI & BRICK - Laboratorio di economia dell'innovazione "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo 201111, University of Turin.
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-CSE-2011-12-13 (Economics of Strategic Management)
- NEP-INO-2011-12-13 (Innovation)
- NEP-SBM-2011-12-13 (Small Business Management)
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- Simachev, Yuri & Kuzyk, Mikhail & Ivanov, Denis, 2012. "Fostering innovation in Russian companies in the post-crisis period: Opportunities and constraints," MPRA Paper 41284, University Library of Munich, Germany.
- Marco Corsino & Roberto Gabriele & Anna Giunta, 2012. "R&D Incentives: The Effectiveness Of A Place-Based Policy," Departmental Working Papers of Economics - University 'Roma Tre' 0169, Department of Economics - University Roma Tre.
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