The differential impact of privately and publicly funded R&D on R&D investment and innovation: The Italian case

Giovanni Cerulli and Bianca Poti ()

No 10, Working Papers from Doctoral School of Economics, Sapienza University of Rome

Abstract: The paper explores the impact of a specific R&D policy tool, the Italian “Fondo per le Agevolazioni della Ricerca” (FAR), on industrial R&D and technological output at firm level. Our objective is threefold: first, identifying econometrically the presence/absence of private R&D investment additionality/crowding-out within a pooled sample, in a series of firms’ subsets (by regional, dimensional, technological and other characterizations), and by taking into account the effect of single as well as a mix of policy instruments; second, exploring the output (innovation) additionality by comparing the differential impact of “privately funded” (firm own resources) and “public funded” industrial R&D expenditures on firm patent applications; third, comparing the structural characteristics of the group of firm performing additionality with that doing crowding-out, in order to appreciate which are the firm characteristics driving to the success of the policy at stake. Our results suggest that FAR has been effective in the pooled sample, although no effect emerges in some subsets of firms. In particular, while large firms seem to have been decisive for the success of this policy, small firms present a more marked crowding-out effect. Furthermore, firm growth’s strategy and capacity of effectively transform R&D input into innovation output (patents) seem to lead toward a better effect in term of additionality.

Keywords: business R&D; public incentives; econometric evaluation (search for similar items in EconPapers)
JEL-codes: C52 O32 O38 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2010, Revised 2010
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~, nep-knm and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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