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Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector

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  • Haskel, Jonathan

    (Imperial College London)

  • Wallis, Gavin

    (University College London)

Abstract

Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other "research" activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils.

Suggested Citation

  • Haskel, Jonathan & Wallis, Gavin, 2010. "Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector," IZA Discussion Papers 4772, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4772
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    More about this item

    Keywords

    R&D; productivity; intangible assets; spillovers;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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