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National or international public funding? Subsidies or loans? Evaluating the innovation impact of R&D support programmes

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  • Huergo, Elena
  • Moreno, Lourdes

Abstract

The objective of this study is to compare the effect of different types of public support for R&D projects on firms’ technological capabilities. We distinguish be-tween low-interest loans and subsidies and between national and European sup-port. Using data on 2,319 Spanish firms during the period 2002-2005, we estimate a multivariate probit to analyse the determinants of firms’ participation in public R&D programmes and, later, the impact of this participation on firms’ technologi-cal capabilities using different indicators. The results provide evidence of the ef-fectiveness of all treatments for improving firms’ innovative performance. Specif-ically, although the three kinds of public aid stimulate the intensity of R&D in-vestment, the highest impact corresponds to soft credits. In addition, national sub-sidies have a higher impact on internal R&D intensity than EU grants, but the op-posite relation is found as regards total R&D intensity. With respect to innovation outputs, apart from the indirect effect of public support by stimulating R&D in-tensity, we also find evidence of a direct effect of participation in the CDTI credit system and in the European subsidy programme on the probability of obtaining product innovations and applying for patents.

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  • Huergo, Elena & Moreno, Lourdes, 2014. "National or international public funding? Subsidies or loans? Evaluating the innovation impact of R&D support programmes," MPRA Paper 54218, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54218
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    1. repec:spr:cejnor:v:25:y:2017:i:4:d:10.1007_s10100-016-0461-8 is not listed on IDEAS
    2. Ascensión Barajas & Elena Huergo & Lourdes Moreno Martín, 2017. "Public Support to Business R&D and the Economic Crisis: Spanish Evidence," Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales 17-03, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
    3. Edina Berlinger & Anita Lovas & Péter Juhász, 2017. "State subsidy and moral hazard in corporate financing," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(4), pages 743-770, December.
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    5. repec:eee:respol:v:47:y:2018:i:8:p:1437-1447 is not listed on IDEAS
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    More about this item

    Keywords

    Soft loans; R&D subsidies; impact assessment;

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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