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Heterogeneity of Returns to Business R&D: What Makes a Difference?

Petr Pleticha

Prague Economic Papers, 2021, vol. 2021, issue 3, 253-271

Abstract: 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)
Date: 2021
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DOI: 10.18267/j.pep.767

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Handle: RePEc:prg:jnlpep:v:2021:y:2021:i:3:id:767:p:253-271