Radical or Incremental: Where Does R&D Policy Hit?

39 Pages Posted: 20 Jan 2015

See all articles by Mathias Beck

Mathias Beck

ETH Zurich

Cindy Lopes Bento

KU Leuven - Department of Managerial Economics, Strategy, and Innovation

Andrea Schenker-Wicki

University of Basel

Multiple version iconThere are 2 versions of this paper

Date Written: September 15, 2014

Abstract

This study investigates the efficacy of public R&D support. Compared to most existing studies, we do not stop at substitution effects or general innovation outcome measures, but we are interested in knowing where the policy effect is highest: on innovation close to the market (i.e. incremental innovation) or on innovation that is still far from the market and hence more risky and radical. Using firm level data from the period 1999 to 2011, we find that the policy hits where the market failure is highest, that is, for radical innovation. Taking into account that the Swiss funding agency encourages collaboration, we find no evidence that the impact of the policy is positively effected by various R&D collaboration patterns.

Keywords: R&D subsidies; collaborative innovation; diversity; innovation performance; radical innovation; incremental innovation; policy evaluation; treatment effects.

JEL Classification: C14, C30, H23, O31, O38

Suggested Citation

Beck, Mathias and Lopes Bento, Cindy and Schenker-Wicki, Andrea, Radical or Incremental: Where Does R&D Policy Hit? (September 15, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-106. Available at SSRN: https://ssrn.com/abstract=2551757 or http://dx.doi.org/10.2139/ssrn.2551757

Mathias Beck (Contact Author)

ETH Zurich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland
+41 44 632 29 46 (Phone)

HOME PAGE: http://kof.ethz.ch

Cindy Lopes Bento

KU Leuven - Department of Managerial Economics, Strategy, and Innovation ( email )

Naamsestraat 69 bus 3500
Leuven, 3000
Belgium

Andrea Schenker-Wicki

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

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