Heterogeneity of Returns to Business R&D: What Makes a Difference?
Prague Economic Papers, 2021, vol. 2021, issue 3, 253-271
Business R&D spending has been shown to exert both direct and indirect positive effects on value added. Nevertheless, the heterogeneity of the returns to R&D has seldom been examined. Using detailed sectoral data from Czechia over the period 1995-2015, this study finds that privately funded business R&D has both direct and spillover effects, but that the publicly funded part of business R&D only leads to spillovers. The results further suggest that both upstream and downstream spillovers matter, regardless of the source of funding, and that during the period studied, R&D returns were heavily affected by the economic crisis. Lastly, private R&D offers significant returns only after reaching a critical mass, while the effects of public R&D spending do not display such non-linearity. This heterogeneity in the returns to business R&D should be reflected in innovation policy design.
Keywords: R& D returns; spillovers; Czechia (search for similar items in EconPapers)
JEL-codes: L14 O32 O33 O47 (search for similar items in EconPapers)
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