Many economists have long held that market failures create a gap between social and private returns to Research and Development (R&D), thereby limiting private incentives to invest in R&D. However, this common belief that firms significantly underinvest in R&D is increasingly being challenged,...

Most studies evaluating the macroeconomic effects of financial support policies on business-funded R&D use econometric methods that do not consider the existence of spatial effects, and generate biased estimates. In this paper, we discus and address this problem using spatial dynamic panel data...