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Public selection and financing of R&D cooperative projects: Credit versus subsidy funding

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  • Santamaría, Lluís
  • Barge-Gil, Andrés
  • Modrego, Aurelia

Abstract

In this article we develop an analytical model of the selection process for R&D cooperative projects, to study the factors that motivate public project selection and corresponding funding, using two different financial instruments: subsidies and credits. For this purpose, we propose a three stage empirical strategy to analyse the differential individual effects of several factors on the decisions taken by the public agency. This analysis is based on project level data from cooperative R&D project calls under the Spanish PROFIT initiative, for the period 2000-2003. The main results show that the public agency uses the two financial instruments to address different objectives. First, some projects close to the market are well supported through credits, while basic research projects receive only selective support in the form of subsidies. Second, there is significant diversity in the selection and funding of technological areas. Third, regarding the explicit goal of fostering cooperation, the public agency selectively favours partnerships with universities and technology institutes through the award of subsidies. However, there seems to be less incentive for large consortia. Fourth, there are significant regional differences among financed projects and, also, our data show sharp yearly fluctuations.

Suggested Citation

  • Santamaría, Lluís & Barge-Gil, Andrés & Modrego, Aurelia, 2010. "Public selection and financing of R&D cooperative projects: Credit versus subsidy funding," Research Policy, Elsevier, vol. 39(4), pages 549-563, May.
    • Handle: RePEc:eee:respol:v:39:y:2010:i:4:p:549-563
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    References listed on IDEAS

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    1. Manuel Fernández-Esquinas & Irene Ramos-Vielba, 2011. "Emerging forms of cross-sector collaboration in the Spanish innovation system," Science and Public Policy, Oxford University Press, vol. 38(2), pages 135-146, March.
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    2. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    3. Polzin, Friedemann & von Flotow, Paschen & Klerkx, Laurens, 2016. "Addressing barriers to eco-innovation: Exploring the finance mobilisation functions of institutional innovation intermediaries," Technological Forecasting and Social Change, Elsevier, vol. 103(C), pages 34-46.
    4. Chapman, Gary & Lucena, Abel & Afcha, Sergio, 2018. "R&D subsidies & external collaborative breadth: Differential gains and the role of collaboration experience," Research Policy, Elsevier, vol. 47(3), pages 623-636.
    5. Mavrotas, George & Makryvelios, Evangelos, 2021. "Combining multiple criteria analysis, mathematical programming and Monte Carlo simulation to tackle uncertainty in Research and Development project portfolio selection: A case study from Greece," European Journal of Operational Research, Elsevier, vol. 291(2), pages 794-806.
    6. Grilli, Luca & Murtinu, Samuele, 2018. "Selective subsidies, entrepreneurial founders' human capital, and access to R&D alliances," Research Policy, Elsevier, vol. 47(10), pages 1945-1963.
    7. Margareta Stela FLORESCU & Alina ªtefania CREÞU, 2013. "Management of Financial Resources for Scientific Research in Universities in Romania," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 14(3), pages 415-424, July.
    8. BagheriMoghadam, Naser & Hosseini, Seyed Hossein & SahafZadeh, Mahdi, 2012. "An analysis of the industry–government–university relationships in Iran's power sector: A benchmarking approach," Technology in Society, Elsevier, vol. 34(4), pages 284-294.
    9. Cao, Qinwei & Qiu, Shunli & Huang, Jian, 2022. "Contradiction and mechanism analysis of science and technology input-output: Evidence from key universities in China," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    10. Segarra Blasco, Agustí, 1958- & Teruel, Mercedes & Bové Sans, Miquel Àngel, 2014. "A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms," Working Papers 2072/242275, Universitat Rovira i Virgili, Department of Economics.
    11. Silva Filipe & Carreira Carlos, 2017. "Financial Constraints: Do They Matter to Allocate R&D Subsidies?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(4), pages 1-26, October.
    12. Silvia Vicente-Oliva & Ángel Martínez-Sánchez & Luis Berges-Muro, 2016. "Enhancing The Outcomes In R&D Collaborative Projects: An Empirical Analysis Of The Middle Ebro Valley In Spain," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-34, October.
    13. Sá, Elisabete S. & Pinho, José Carlos M.R. de, 2019. "Effect of entrepreneurial framework conditions on R&D transfer to new and growing firms: The case of European Union innovation-driven countries," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 47-58.
    14. Martínez-Román, Juan A. & Gamero, Javier & Tamayo, Juan A. & Delgado-González, Loreto, 2020. "Empirical analysis of organizational archetypes based on generation and adoption of knowledge and technologies," Technovation, Elsevier, vol. 96.
    15. Materia, V.C. & Pascucci, S. & Kolympiris, C., 2015. "Understanding the selection processes of public research projects in agriculture: The role of scientific merit," Food Policy, Elsevier, vol. 56(C), pages 87-99.

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