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Public R&D Subsidies, Outside Private Support, and Employment Growth

  • Link, Albert N.

    ()

    (University of North Carolina at Greensboro, Department of Economics)

  • Scott, John T.

    ()

    (Dartmouth College)

In the aftermath of the passage of the American Recovery and Reinvestment Act of 2009, the employment effects of public subsidies have been scrutinized because of new emphasis on public accountability and transparency. In this paper we investigate conditions in which public subsidies of research and development (R&D) in small firms stimulate employment growth. We find, based on an empirical analysis of employment growth induced by U.S. Department of Defense Small Business Innovation Research (SBIR) program awards, that the stimulated employment growth is greater under two conditions: one, the presence of outside investors providing additional funding for the R&D, and two, when an exceptional amount of intellectual property is created by the publicly subsidized R&D. In addition to outside investors, other firms that make commercial agreements with the subsidized firm appear important for the employment growth of the subsidized firm. Cooperation between the small business doing the R&D and other firms is an important determinant of the commercial success of the technologies created with the support of public funds.

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File URL: http://bae.uncg.edu/assets/research/econwp/2013/13-1.pdf
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Paper provided by University of North Carolina at Greensboro, Department of Economics in its series Working Papers with number 13-1.

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Length: 24 pages
Date of creation: 22 Feb 2013
Date of revision:
Handle: RePEc:ris:uncgec:2013_001
Contact details of provider: Postal: Box 26165, Greensboro, NC 27402-6165
Phone: (336) 334-5463
Fax: (336) 334-4089
Web page: http://www.uncg.edu/bae/econ/

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  1. Albert N. Link & John T. Scott, 2013. "Governments as entrepreneur: Evaluating the commercialization success of SBIR projects," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 2, pages 25-38 Edward Elgar.
  2. José Ángel Zúñiga-Vicente & César Alonso-Borrego & Francisco J. Forcadell & José I. Galán, 2014. "Assessing The Effect Of Public Subsidies On Firm R&D Investment: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 36-67, 02.
  3. Albert N. Link & John T. Scott, 2013. "The exploitation of publicly funded technology," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 8, pages 127-135 Edward Elgar.
  4. Albert N. Link & John T. Scott, 2012. "Employment Growth from Public Support of Innovation in Small Firms," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number eg, June.
  5. Link, Albert & Scott, John, 2010. "Employment Growth from the Small Business Innovation Research Program," Working Papers 10-8, University of North Carolina at Greensboro, Department of Economics.
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