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The "Matthew effect" in R&D public subsidies: The Italian evidence

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  • Antonelli, Cristiano
  • Crespi, Francesco

Abstract

This paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms and elaborates a crucial distinction between vicious Matthew-effects and virtuous Matthew-effects. The latter identifies the role of dynamics increasing returns based upon accumulation of competence stemming from learning, learning to learn and knowledge cumulability. On the contrary vicious Matthew-effects lead to the substitution of private funds with public ones and represent an additional source of ‘government failure’ which has not been specifically addressed by previous literature. The empirical results show that past grants increase the probability to access further funding. Both the descriptive and econometric evidences confirm the persistent character of R&D subsidies, providing indication that some mechanisms related to a Matthew effect is at work for the observed firms. Moreover, the results suggest that the stable pattern in the access to R&D public subsidies by firms is associated with a ‘picking the winner’ strategy adopted by public authorities, which, positively contributed to the effectiveness of the policy instrument.

Suggested Citation

  • Antonelli, Cristiano & Crespi, Francesco, 2013. "The "Matthew effect" in R&D public subsidies: The Italian evidence," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1523-1534.
  • Handle: RePEc:eee:tefoso:v:80:y:2013:i:8:p:1523-1534
    DOI: 10.1016/j.techfore.2013.03.008
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    1. repec:oup:indcch:v:25:y:2016:i:6:p:955-975. is not listed on IDEAS
    2. repec:taf:ecinnt:v:26:y:2017:i:6:p:554-573 is not listed on IDEAS
    3. repec:eee:tefoso:v:147:y:2019:i:c:p:174-184 is not listed on IDEAS
    4. repec:gam:jsusta:v:10:y:2018:i:7:p:2205-:d:154916 is not listed on IDEAS
    5. Sergio Afcha & Jose García-Quevedo, 2016. "The impact of R&D subsidies on R&D employment composition," Industrial and Corporate Change, Oxford University Press, vol. 25(6), pages 955-975.
    6. Ziesemer, Thomas, 2019. "The effects of R&D subsidies and publicly performed R&D on business R&D: A survey," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Carboni, Oliviero A., 2017. "The effect of public support on investment and R&D: An empirical evaluation on European manufacturing firms," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 282-295.
    8. repec:eee:respol:v:46:y:2017:i:10:p:1851-1862 is not listed on IDEAS

    More about this item

    Keywords

    R&D subsidies; Persistence; Technology policy; Matthew effects;

    JEL classification:

    • 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

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