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

Petr Pleticha

No 2019/32, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: Business R&D spending has been showed to exert a positive direct as well as indirect, spillover effects on value added. Nevertheless, heterogeneity of the returns to R&D has been seldom 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 the 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 profess such non-linearity. The heterogeneity of returns to business R&D needs to be reflected in the design of innovation policy.

Keywords: R&D returns; spillovers; Czechia (search for similar items in EconPapers)
JEL-codes: L14 O32 O33 O47 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-11, Revised 2019-11
New Economics Papers: this item is included in nep-cse and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2019_32

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