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Assessing the effect of public funding on private innovation investment in Uruguay

Author

Listed:
  • Felipe Berrutti

    (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a)

  • Carlos Bianchi

    (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a)

Abstract

Despite the recent research efforts and methodological improvements, empirical evidence on the additionality effects of public innovation programs shows heterogeneous results by firm, sector, country and type of innovation. This paper assesses input additionality of public funding on private innovative investment of Uruguayan firms by applying a longitudinal analysis from 2001 to 2012. During this period, there was a dramatic increase of public innovation funds. However, the number of innovative firms remains stable and the amount of public funding for innovation at firm level is still very low. In this context, previous innovation experience appears as the most significant determinant of access to public innovation support. Moreover, we find evidence of a moderate substitution effect between public and private funds. We analyzed heterogeneous effects according to type of innovation, finding significant effects only for innovation based on acquisition of artifacts (embodied). We conclude on the main challenges of the current policy mix in Uruguay, stressing the relevance of further research lines on behavioral additionality to contribute to improve policy results.

Suggested Citation

  • Felipe Berrutti & Carlos Bianchi, 2017. "Assessing the effect of public funding on private innovation investment in Uruguay," Documentos de Trabajo (working papers) 17-04, Instituto de Economía - IECON.
  • Handle: RePEc:ulr:wpaper:dt-04-17
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    File URL: https://hdl.handle.net/20.500.12008/18978
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    More about this item

    Keywords

    public funding; input additionality; innovation survey; Uruguay;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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