Fostering innovative business investment in Spain
Aida Caldera Sánchez,
Gabor Fulop and
Pilar García Perea ()
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Aida Caldera Sánchez: OECD
Gabor Fulop: OECD
No 1387, OECD Economics Department Working Papers from OECD Publishing
Spain has chronically low productivity growth, which undermines its ability to generate higher living standards. Important contributors to low productivity growth are the misallocation of capital to low productivity firms and under-investment in knowledge-based capital. To foster a better allocation of capital a first priority is to better tune bank, capital market and government financing to the needs of new innovative firms. This could be done through better small and medium-sized enterprises (SMEs) bond and loan securitisation tools, reallocating public financing to early stage finance and making it easier for firms to access public innovation funding by shifting some funding from loans to grants for research and development (R&D) projects. Attracting more foreign capital and improving the regulatory framework to increase the return on investment would also help. This could be done by reducing regulatory barriers that hold back competition, improving the neutrality of the tax system, improving pricing signals and reforming insolvency laws.
JEL-codes: E22 G24 G28 O16 O38 O44 O47 O5 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1387-en
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