Article thumbnail
Location of Repository

Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence

By Paul A. David, Bronwyn H. Hall and Andrew A. Toole

Abstract

Is public R&D spending complementary and thus “additional” to private R&D spending, or does it substitute for and tend to “crowd out” private R&D? Conflicting answers are given to this question. We survey the body of available econometric evidence accumulated over the past 35 years. A framework for analysis of the problem is developed to help organize and summarize the findings of econometric studies based on time series and cross-section data from various levels of aggregation (laboratory, firm, industry, country). The findings overall are ambivalent and the existing literature as a whole is subject to the criticism that the nature of the “experiment(s)” that the investigators envisage is not adequately specified. We conclude by offering suggestions for improving future empirical research on this issue

OAI identifier:

Suggested articles

Citations

  1. (1989). A failure-inducement model of research and development expenditure,
  2. (1998). Absorptive capacity, co-authoring behavior, and the organization of research in drug discovery,
  3. (1991). Academic research and industrial innovation,
  4. (1998). Academic research and industrial innovation: an update of empirical findings,
  5. (1995). Academic research underlying industrial innovations: sources, characteristics, and financing,
  6. (1982). An analysis of the composition of R&D spending,
  7. (1999). An Empirical Evaluation of the Effects of R&D Subsidies,
  8. (1992). Analyzing the payoffs from basic research,
  9. (1987). Appropriating returns from industrial research and development.
  10. (1985). Assessing the Impact of Federal Industrial Research and Development Expenditure on Private Research and Development activity (Paper prepared for the Workshop on the Federal Role
  11. (1997). Competition between public & private research funding in The Bayh-Dole era, (Working Paper,
  12. (1999). Do government-industry R&D programs increase private R&D?: The Case of the
  13. (1998). Does federal funding crowd out private funding of science?, presentation at the American Economics Association meetings,
  14. (1985). Economic measures of the returns to federal research and development (Paper prepared for the Workshop on the Federal Role
  15. (1962). Economic welfare and the allocation of resources to invention, in: Nelson, Richard (Editor), The Rate and Direction of Inventive Activity,
  16. (1984). Effects of federal support on company-financed R and D: the case of energy,
  17. (1983). Effects of government R&D on private R&D investment and productivity: a macroeconomic analysis,
  18. (1999). Endogenous R&D spillovers and industrial research productivity, presentation at the American Economics Association meetings.
  19. (1998). Endogenous R&D spillovers, 'invisible' R&D, and industrial productivity, presentation at the American Economics Association meetings.
  20. (1990). Estimating the impact of government R&D,
  21. (1998). Evidence from patents and patent citations on the impact of NASA and other federal labs on commercial innovation,
  22. (1979). Federal funding of industrial R&D, stimulus or substitute?,
  23. (1985). Federal Funding of R&D in Transportation, The Case of Aviation (Paper prepared for the Workshop on the Federal Role
  24. (1981). Federal support of technological growth in industry: some evidence of crowding out,
  25. (1990). Federally Sponsored R&D and Productivity Growth, Federal Reserve Economics Discussion Paper No. 121, (Federal Reserve Board of Governors,
  26. (1984). Firm versus industry variability in R&D intensity,
  27. (1996). Flows of knowledge from universities and federal labs: modeling the flow of patent citations over time and across institutional and geographic boundaries,
  28. (1999). Funding a Revolution: Government Support for Computing Research, Report
  29. (1982). Government and Technical Progress: A Cross-Industry Analysis.
  30. (1999). Government spending on research and development in the UK.
  31. (1976). Governmental support of industrial research and development in France: theory and practice,
  32. (1996). High-tech R&D subsidies: estimating the effects of Sematech,
  33. (1999). How effective are fiscal incentives for R&D? a review of the evidence, Research Policy: this volume.
  34. (1988). Innovation expenditures and the role of government in
  35. (1998). Investment, R&D, subsidies, and credit constraints (Working Paper,
  36. (1978). Market structure and innovation: a new perspective,
  37. (1973). Market structure and R&D in Canadian manufacturing industries,
  38. (1985). Measuring economic effects of federal research and development expenditures, recent history with special emphasis on federal R&D performed
  39. (1985). Measuring the economic impact of federal research and development investment in civilian space activities
  40. (1998). Public Accountability: Evaluating Technology-Based Institutions.
  41. (1999). Public Research, Public Regulation, and Expected Profitability: The Determinants of Pharmaceutical Research
  42. (1998). Public vs. private funding of R&D and rates of growth:
  43. (1997). Public-private interaction and the productivity of pharmaceutical research,
  44. (1995). R&D and productivity: econometric results and measurement issues,
  45. (1966). R&D: Essays on the economics of research and development
  46. (1998). Reputation and competence in publicly funded science: estimating the effects on research group productivity,
  47. (1997). Research and development after the Cold War,
  48. (1973). Research and development in industrial growth: a comment,
  49. (1980). Returns to research and development in the private sector,
  50. (1998). Revolution from above: the role of the state in creating the German research system, 1810-1910,
  51. (1984). Tests of a Schumpeterian model of R&D and market structure,
  52. (1999). The contribution of public science to industrial innovation: an application to the pharmaceutical industry (Stanford Institute for Economic Policy Research Working Paper,
  53. (1976). The determinants of R&D expenditures,
  54. (1989). The effects of governmental financing on firms' R&D activities, a theoretical and empirical investigation,
  55. (1981). The effects of mission-oriented public R&D spending on private industry,
  56. (1999). The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program,
  57. (1998). The impact and organization of publicly-funded research and development
  58. (1991). The impact of R&D investment on productivity – new evidence using linked R&D-LRD data,
  59. (1997). The increasing linkage between U.S. technology and public science,
  60. (1979). The Influence Of Federal R&D Funding On The Demand For And Returns To Industrial R&D, Working Paper CRC-388 (The Public Research Institute).David,
  61. (1979). The Innovating Firm
  62. (1993). The Japanese system of innovation: past, present and future,
  63. (1998). The political economy of public science,
  64. (1996). The private and social returns to research and development,
  65. (1988). The private R&D investment response to federal design and technical competitions,
  66. (1975). The process of technical change
  67. (1984). The relationship between federal contract R&D and company R&D,
  68. (1999). The research network and the ‘new economics of science’: from metaphors to organizational behaviors,”
  69. (1959). The simple economics of basic scientific research,
  70. (1991). The Technology Pork Barrel.
  71. (1995). The vertical chain of R&D in the pharmaceutical industry,
  72. (1994). Towards a new economics of science,
  73. (1991). What makes basic research economically useful?
  74. (1991). Why are government and private R&D complements?,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.