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Evaluating the impact of technology development funds in emerging economies: evidence from Latin America

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  • Bronwyn Hall
  • Alessandro Maffioli

Abstract

Evaluations of government Technology Development Funds (TDF) in Argentina, Brazil, Chile and Panama are surveyed. All the evaluations were done at the recipient (firm) level using data from innovation surveys, industrial surveys, and administrative records of the granting units, together with quasi-experimental econometric techniques to minimise the effects of any selection bias. TDF effectiveness is found to depend on the financing mechanism used, on the presence of non-financial constraints, on firm-university interaction, and on the characteristics of the target beneficiaries. Four levels of potential impact were considered: R&D input additionality, behavioural additionality, increases in innovative output, and improvements in performance. The evidence suggests that TDF do not crowd out private investment and that they positively affect R&D intensity. In addition, participation in TDF induces a more proactive attitude of beneficiary firms towards innovation activities. However, the analysis does not find much statistically significant impact on patents or new product sales and the evidence on firm performance is mixed, with positive results in terms of firm growth, but little corresponding positive impact on measures of firm productivity, possibly because the horizon over which the evaluation was conducted was too short. Cet article passe en revue les evaluations des fonds de developpement technologique (TDF) des gouvernements de l'Argentine, du Bresil, du Chili et du Panama. Toutes les evaluations ont ete menees au niveau du recipiendaire (l'entreprise) a l'aide des donnees des enquetes sur l'innovation, des enquetes industrielles et des donnees administratives des organismes subventionneurs et a l'aide de techniques econometriques quasi experimentales afin de minimiser les effets de biais de selection. Il est montre que l'efficacite des TDF depend du mecanisme de financement utilise, de la presence de contraintes non-financieres, des interactions entre entreprises et universites et des caracteristiques des beneficiaires vises. Les effets des subventions sont analyses a quatre niveaux: la R&D, le comportement innovateur, l'ampleur de l'innovation et les performances des entreprises. Il y a de bonnes raisons de penser que les TDF n'evincent pas les investissements prives et qu'ils affectent positivement l'intensite en R&D. De plus, la participation au TDF incite les entreprises beneficiaires a une attitude plus pro-active au travers de leurs activites innovantes. Cependant, l'analyse ne revele pas d'impact significatif statistiquement sur les depots de brevets ou les ventes de nouveaux produits et l'impact sur la performance des firmes est mitige, avec des resultats positifs en termes de croissance de l'entreprise mais avec peu d'impact induit sur la mesure de la productivite des firmes, probablement parce que l'evaluation a ete realisee sur une periode trop courte.

Suggested Citation

  • Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
  • Handle: RePEc:taf:eurjdr:v:20:y:2008:i:2:p:172-198
    DOI: 10.1080/09578810802060819
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    More about this item

    Keywords

    innovation and R&D; policy evaluation;

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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