Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other “research” activities, such as software. Second, argument still...

We analyze the effects of a large place-based policy, subsidizing up to 50% of investment costs of manufacturing firms in East Germany after reunification. We show that a 1-percentage-point decrease in the subsidy rate leads to a 1% decrease in manufacturing employment. We document important...

We review and condense the body of literature on the economic returns of public R&D on private R&D and find that: (i) private returns to R&D appear to be large and larger than the returns to alternative investments; (ii) private R&D and R&D subsidies are positively correlated and there is no...

Current literature on the impact assessment of government innovation subsidies is mainly empirical driven and lacks an overarching theoretical model to explain the conditions under which government subsidies create positive additionalities on private R&D investment. In this paper, we present a...

The optimal mix of growth policies is derived within a comprehensive endogenous growth model. The analysis captures important elements of the tax-transfer system and takes into account transitional dynamics. Currently, for calculating corporate taxable income US firms are allowed to deduct...

Using a unique longitudinal representative survey of both manufacturing and non-manufacturing businesses in the United States during the 1990's, I examine the incidence and intensity of organizational innovation and the factors associated with investments in organizational innovation. Past...

The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate...

Teamwork in research has been on the rise and so has the size of R&D teams. This paper offers an explanation for increasing team size that we call the "racing against time" hypothesis: With innovation races more competitive globally, R&D firms need to finish research projects as quickly as...

The purpose of this study is to investigate the relationship between a firm's R&D expenditures considered as an investment in knowledge, and its productivity, looking at sectoral peculiarities which may emerge; to this end, we use a large unique longitudinal database consisting of 1,809 US and...