We study whether there is scope for using subsidies to smooth out barriers to R&D performance and expand the share of R&D firms in Spain. We consider a dynamic model with sunk entry costs in which firms’ optimal participation strategy is defined in terms of two subsidy thresholds that...

This paper proposes a Bayesian approach to estimate a factor augmented productivity equation. We exploit the panel dimension of our data and distinguish individual-specic and time-specic factors. On the basis of 14 technology and infrastructure indicators from 37 countries over a 10-year...