Public R&D policies and private R&D investment: a survey of the empirical evidence

Bettina Becker*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results.

Original languageEnglish
Pages (from-to)917–942
Number of pages26
JournalJournal of Economic Surveys
Volume29
Issue number5
Early online date12 Aug 2014
DOIs
Publication statusPublished - Dec 2015

Fingerprint

Empirical evidence
Tax credits
Subsidies
University research
Human capital
Public policy
Government funding
Resources
Financial economics
Financial crisis
Public subsidies
Economic growth
Systematic review
Government
Crowd-out
Nonlinearity

Bibliographical note

This is the peer reviewed version of the following article: Becker, B. (2015). Public R&D policies and private R&D investment: a survey of the empirical evidence. Journal of economic surveys, Early View, which has been published in final form at http://dx.doi.org/10.1111/joes.12074. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

Keywords

  • innovation policy
  • public funding
  • research and development
  • research and development policy

Cite this

@article{a8e23cf405754973a7723aa6a1fccb90,
title = "Public R&D policies and private R&D investment: a survey of the empirical evidence",
abstract = "The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results.",
keywords = "innovation policy, public funding, research and development, research and development policy",
author = "Bettina Becker",
note = "This is the peer reviewed version of the following article: Becker, B. (2015). Public R&D policies and private R&D investment: a survey of the empirical evidence. Journal of economic surveys, Early View, which has been published in final form at http://dx.doi.org/10.1111/joes.12074. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.",
year = "2015",
month = "12",
doi = "10.1111/joes.12074",
language = "English",
volume = "29",
pages = "917–942",
journal = "Journal of Economic Surveys",
issn = "0950-0804",
publisher = "Wiley-Blackwell",
number = "5",

}

Public R&D policies and private R&D investment : a survey of the empirical evidence. / Becker, Bettina.

In: Journal of Economic Surveys, Vol. 29, No. 5, 12.2015, p. 917–942.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Public R&D policies and private R&D investment

T2 - a survey of the empirical evidence

AU - Becker, Bettina

N1 - This is the peer reviewed version of the following article: Becker, B. (2015). Public R&D policies and private R&D investment: a survey of the empirical evidence. Journal of economic surveys, Early View, which has been published in final form at http://dx.doi.org/10.1111/joes.12074. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

PY - 2015/12

Y1 - 2015/12

N2 - The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results.

AB - The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high-skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd-out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high-skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non-linearities is one area of research that may refine existing results.

KW - innovation policy

KW - public funding

KW - research and development

KW - research and development policy

UR - http://www.scopus.com/inward/record.url?scp=84905637263&partnerID=8YFLogxK

U2 - 10.1111/joes.12074

DO - 10.1111/joes.12074

M3 - Article

VL - 29

SP - 917

EP - 942

JO - Journal of Economic Surveys

JF - Journal of Economic Surveys

SN - 0950-0804

IS - 5

ER -