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Public Subsidies to Business R&D: Do They Stimulate Private Expenditures?

2005; SAGE Publishing; Volume: 23; Issue: 2 Linguagem: Inglês

10.1068/c0428

1472-3425

María Callejón, José García‐Quevedo,

Energy, Environment, Economic Growth

The purpose of this paper is to obtain new evidence about a fundamental question of empirical studies on technology policy. Is public R&D a complement to or a substitute for private R&D? We examine, at an industry level, the relationship between private R&D expenditures and public subsidies in Spain, using panel data and controlling the interindustry differences in technological opportunities. The results suggest that public subsidies have complemented private R&D. This is an interesting result because technology policy was reoriented in the 1990s with a reduction of direct government subsidies for R&D and an increase in tax incentives.