Matthew effects and R&D subsidies: knowledge cumulability in high-tech and low-tech industries

Francesco Crespi and Cristiano Antonelli

No 140, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: The paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms in high-tech and low-tech industries. It applies the distinction between virtuous Matthew-effects and vicious Matthew-effects. The former qualifies the persistence in the discretionary allocation of public subsidies in terms of sheer reputation based upon previous awards. The latter is identified by the role of the accumulation of competence stemming from past grants in current R&D activities. Virtuous Matthew effects are found in high-tech industries where knowledge cumulability is higher. In traditional industries, vicious Matthew effects prevail for the lower levels of knowledge cumulability. Here reputation-Matthew-effects can lead to substitution of private funds with public ones. The empirical analysis is based on Transition Probability Matrices, probit regressions and Propensity Score Matching on around 700 Italian firms in the years 1998-2003.

Keywords: Innovation; R&D subsidies; Matthew effects; past dependence; path dependence (search for similar items in EconPapers)
JEL-codes: H25 H32 L52 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-cse, nep-ino and nep-sbm
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: MATTHEW EFFECTS AND R&D SUBSIDIES: KNOWLEDGE CUMULABILITY IN HIGH-TECH AND LOW-TECH INDUSTRIES (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0140

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