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The Spillover Effects of Publicly Supported Private R&D : Analysis of NEDO Follow-up Survey Data

  • Matsushima, Kazunari
  • Aoshima, Yaichi
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    Innovation creating economic values has become a vital issue due to severe global competition. Given such a circumstance, government funding has flowed not only into pure research, but into applied research and product development linked directly with commercialization as well. Such a tendency has been accelerated since “Bayh-Dole Act” was enacted, which made it easier for firms to appropriate R&D outcomes. Increased appropriablity that promotes commercialization, however, may prevent technological outcome produced by a government-funded R&D project from being widely utilized in a society. The project aimed at immediate commercialization may tend to create context-specific knowledge that can be applied only to the particular product category rather than generalized technological knowledge that can be widely available for other products or technological fields. Such a project may also have strong incentives to keep such technologies in-house. Therefore, the policy side confronts dilemma that the more government attempts to encourage private R&D activity with public support that are linked directly with market competition, the more the indirect spillover effects are sacrificed because of increased appropriability. To resolve this dilemma, we must identify the factors that influence the spillover effects of private R&D projects receiving public support. In this paper, we first classified a spillover effect in accordance with three dimensions, spillover contents, scope of the spillover, and spillover recipient field. Furthermore, spillover contents can be divided into “technological spillover,” “cognitive spillover” and “social-relations spillover.” And then, we empirically investigate the factors that influence spillover effects by analyzing data obtained from 301 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organization), Japan’s public management organization promoting private R&D. Our findings show that while the project starting at the exploratory phase had positive effects on technological spillover both within and outside the firm, and that spillover outside the firm is restricted when the project is of great strategic importance for a firm. We also found that information exchanges with other internal divisions had positive effects on not only technical spillover but on cognitive spillover and social-relations spillover. Results imply that it is necessary for supporting institutions to confirm that projects are not isolated internally and that there is a system in place to receive assistance and cooperation from other divisions.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/26738/1/070iirWP14-04.pdf
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    Paper provided by Institute of Innovation Research, Hitotsubashi University in its series IIR Working Paper with number 14-04.

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    Length: 30 p.
    Date of creation: Jun 2014
    Date of revision:
    Handle: RePEc:hit:iirwps:14-04
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    1. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
    2. Dominique Guellec & Bruno van Pottelsberghe de la Potterie, 2000. "The Impact of Public R&D Expenditure on Business R&D," OECD Science, Technology and Industry Working Papers 2000/4, OECD Publishing.
    3. Nadiri, M.I., 1993. "Innovations and Technological Spillovers," Working Papers 93-31, C.V. Starr Center for Applied Economics, New York University.
    4. Almus, Matthias & Czarnitzki, Dirk, 2001. "The effects of public R&D subsidies on firms' innovation activities: the case of Eastern Germany," ZEW Discussion Papers 01-10, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    7. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    8. M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc.
    9. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
    10. David, Paul A. & Hall, Bronwyn H., 2000. "Heart of Darkness: Modeling Public-Private Funding Interactions Inside the R&D Black Box," Department of Economics, Working Paper Series qt5g29w0xq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    11. Cockburn, Iain M & Henderson, Rebecca M, 1998. "Absorptive Capacity, Coauthoring Behavior, and the Organization of Research in Drug Discovery," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 157-82, June.
    12. DUGUET Emmanuel, 2004. "Are R&D subsidies a substitute or a complement to privately funded R&D? Evidence from France using propensity score methods for non- experimental data," Public Economics 0411007, EconWPA.
    13. Jaffe, Adam B, 1988. "Demand and Supply Influences in R&D Intensity and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 431-37, August.
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    15. González, Xulia & Pazó, Consuelo, 2008. "Do public subsidies stimulate private R&D spending?," Research Policy, Elsevier, vol. 37(3), pages 371-389, April.
    16. Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
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