The "Matthew effect" in R&D public subsidies: The Italian evidence

Cristiano Antonelli and Francesco Crespi

Technological Forecasting and Social Change, 2013, vol. 80, issue 8, 1523-1534

Abstract: This paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms and elaborates a crucial distinction between vicious Matthew-effects and virtuous Matthew-effects. The latter identifies the role of dynamics increasing returns based upon accumulation of competence stemming from learning, learning to learn and knowledge cumulability. On the contrary vicious Matthew-effects lead to the substitution of private funds with public ones and represent an additional source of ‘government failure’ which has not been specifically addressed by previous literature. The empirical results show that past grants increase the probability to access further funding. Both the descriptive and econometric evidences confirm the persistent character of R&D subsidies, providing indication that some mechanisms related to a Matthew effect is at work for the observed firms. Moreover, the results suggest that the stable pattern in the access to R&D public subsidies by firms is associated with a ‘picking the winner’ strategy adopted by public authorities, which, positively contributed to the effectiveness of the policy instrument.

Keywords: R&D subsidies; Persistence; Technology policy; Matthew effects (search for similar items in EconPapers)
JEL-codes: H25 H32 L52 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:80:y:2013:i:8:p:1523-1534

DOI: 10.1016/j.techfore.2013.03.008

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