Public Subsidies to Business R&D: Do They Stimulate Private Expenditures?

María Callejón and José García-Quevedo
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María Callejón: Department of Economic Policy, University of Barcelona, Av/Diagonal, 690.08034 Barcelona, Spain
José García-Quevedo: Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Av/Diagonal, 690.08034 Barcelona, Spain
Authors registered in the RePEc Author Service: Maria Callejon and Jose Garcia-Quevedo

Environment and Planning C, 2005, vol. 23, issue 2, 279-293

Abstract: The purpose of this paper is to obtain new evidence about a fundamental question of empirical studies on technology policy. Is public R&D a complement to or a substitute for private R&D? We examine, at an industry level, the relationship between private R&D expenditures and public subsidies in Spain, using panel data and controlling the interindustry differences in technological opportunities. The results suggest that public subsidies have complemented private R&D. This is an interesting result because technology policy was reoriented in the 1990s with a reduction of direct government subsidies for R&D and an increase in tax incentives.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:23:y:2005:i:2:p:279-293

DOI: 10.1068/c0428

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