Heterogeneity of Returns to Business R&D: What Makes a Difference?
Heterogeneity of Returns to Business R&D: What Makes a Difference?
Author(s): Petr PletichaSubject(s): Social Sciences, Economy, Business Economy / Management
Published by: Vysoká škola ekonomická v Praze
Keywords: R&D returns; spillovers; Czechia
Summary/Abstract: Business R&D spending has been shown to exert both direct and indirect positive effects on value added. Nevertheless, the heterogeneity of the returns to R&D has seldom been 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 during the period studied, 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 display such non-linearity. This heterogeneity in the returns to business R&D should be reflected in innovation policy design.
Journal: Prague Economic Papers
- Issue Year: 30/2021
- Issue No: 3
- Page Range: 253-271
- Page Count: 19
- Language: English