R&D subsidies on the knowledge-sourcing process increase firms’ innovation outcomes, thus making this policy … intervention effective in promoting innovation. By using panel data from Spanish manufacturing firms, this article presents … Spain also favor more firm innovation, measured by patent applications and new product launches. It is also documented that …

The role of innovation in improving productivity might vary according to a country's relative position in technology … advancement. Frontier countries might benefit more from policies that promote firms' internal innovation (create), while follower … countries would gain more from policies favoring the adoption of existing technologies through innovation outsourcing (buy …