Additionality of public R&D funding for business R&D – a dynamic panel data analysis. (1st January 2012)

• Record Type: Journal Article
• Authors: Bloch, Carter; Graversen, Ebbe Krogh
• Is Part Of: World review of science, technology and sustainable development. Volume 9:Number 2/3/4(2012)
• Page Start: 204
• Page End: 220
• Publication Date: 2012-01-01
• Subjects: additionality -- public R&D funding -- crowding out -- selection bias; Sustainable development -- Periodicals; Appropriate technology -- Periodicals; Technology transfer -- Periodicals; Globalization -- Periodicals; 338.92705
• Languages: English
• ISSNs: 1741-2242

Abstract

An important issue in R&D policy is whether publicly funded R&D is a substitute or a complement to privately funded R&D. However, measuring the impact of R&D policies has proven a difficult task, complicated by simultaneity and selection bias. We utilise a dynamic panel data approach to examine the effect of public funding that takes account of both these potential biases, using R&D data for Danish firms from 1995 to 2005. We find robust evidence of significant complementary effects, with a 1% increase in public funding yielding around a 0.12% increase in privately funded R&D. For predicted values of public funding for both R&D active firms that have and have not received public funding, estimates are slightly lower, at around 0.09%.