Effects of public funding on firm innovation: transforming or reinforcing a weak innovation pattern?

Felipe Berrutti and Carlos Bianchi

Economics of Innovation and New Technology, 2020, vol. 29, issue 5, 522-539

Abstract: This paper adds to the ongoing debate on the effects of public funding programmes on business innovation. This policy instrument, based upon a simple but a robust rationale, has been applied in an almost homogeneous manner in different contexts, but evidence from such experiences is far from shown homogeneous effects. The main contribution of this paper is that it shows the limitations faced by public funding instruments in affecting a traditionally low innovative pattern. Using panel data techniques, we find heterogeneous effects of public funding on the innovation behaviour of Uruguayan firms between 2001 and 2015. Our results show that, after a strong public policy effort, the critical mass of innovative firms has hardly changed. Input additionality effects of public funding in private innovation investment are found, but only for innovation activities based on the acquisition of embodied knowledge. Moreover, we obtain some evidence of behavioural additionality in process and organizational innovation leading to higher productivity levels, but we find no effects on interaction for innovation.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://hdl.handle.net/10.1080/10438599.2019.1636452 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:29:y:2020:i:5:p:522-539

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GEIN20

DOI: 10.1080/10438599.2019.1636452

Access Statistics for this article

Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli

More articles in Economics of Innovation and New Technology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().