Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms
From the perspective of a heterogeneous firm framework, we investigate the direct and spillover effects of public research and development (R&D) subsidies, firm heterogeneity, and external factors on innovation. Our analysis is based on panel data from manufacturing firms in Korea. We find three...
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| Language: | English |
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Elsevier
2025-02-01
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| Series: | Heliyon |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844025007868 |
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| author | Bongsuk Sung Dan Zhang Sang-Do Park |
| author_facet | Bongsuk Sung Dan Zhang Sang-Do Park |
| author_sort | Bongsuk Sung |
| collection | DOAJ |
| description | From the perspective of a heterogeneous firm framework, we investigate the direct and spillover effects of public research and development (R&D) subsidies, firm heterogeneity, and external factors on innovation. Our analysis is based on panel data from manufacturing firms in Korea. We find three apparent roles of public R&D subsidy in enhancing firm-level innovation. First, public R&D subsidy has a direct positive impact on innovation in both the short and long run. Second, it does not have a stand-alone spillover effect on innovation. Third, public R&D subsidies have a positive spillover effect on innovation when combined with organizational slack in the short and long run and with leverage and firm size in the short run. Moreover, our analysis reveals that the impact of public subsidies, firm heterogeneity, external factors, and their interaction with innovation is primarily observed in firms with high absorptive capacity, not in those with low absorptive capacity. Based on these findings, the study recommends that when a government formulates its R&D policies, in order to enhance the efficiency and effectiveness of public R&D subsidies, it is necessary to prioritize understanding the various conditions and circumstances associated with the public R&D-productivity nexus. It is especially crucial to keep in mind that when firm heterogeneity—as a source of absorptive capacity and organizational learning—and the similarity of technology-based innovations are properly considered, public R&D subsidies can be efficient and effective policy tools for increasing direct benefits and inter-firm spillovers. |
| format | Article |
| id | doaj-art-8d80a930b7114acdb9e14be741bf0c60 |
| institution | Kabale University |
| issn | 2405-8440 |
| language | English |
| publishDate | 2025-02-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj-art-8d80a930b7114acdb9e14be741bf0c602025-02-05T04:32:20ZengElsevierHeliyon2405-84402025-02-01113e42406Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firmsBongsuk Sung0Dan Zhang1Sang-Do Park2Department of International Trade, Kyonggi University, Suwon-si, Gyeonggi-do, South KoreaDepartment of Economics and Trade, Guangzhou Huashang College, Guangdong, ChinaDepartment of Global Business, Konkuk University, Seoul, South Korea; Corresponding author.From the perspective of a heterogeneous firm framework, we investigate the direct and spillover effects of public research and development (R&D) subsidies, firm heterogeneity, and external factors on innovation. Our analysis is based on panel data from manufacturing firms in Korea. We find three apparent roles of public R&D subsidy in enhancing firm-level innovation. First, public R&D subsidy has a direct positive impact on innovation in both the short and long run. Second, it does not have a stand-alone spillover effect on innovation. Third, public R&D subsidies have a positive spillover effect on innovation when combined with organizational slack in the short and long run and with leverage and firm size in the short run. Moreover, our analysis reveals that the impact of public subsidies, firm heterogeneity, external factors, and their interaction with innovation is primarily observed in firms with high absorptive capacity, not in those with low absorptive capacity. Based on these findings, the study recommends that when a government formulates its R&D policies, in order to enhance the efficiency and effectiveness of public R&D subsidies, it is necessary to prioritize understanding the various conditions and circumstances associated with the public R&D-productivity nexus. It is especially crucial to keep in mind that when firm heterogeneity—as a source of absorptive capacity and organizational learning—and the similarity of technology-based innovations are properly considered, public R&D subsidies can be efficient and effective policy tools for increasing direct benefits and inter-firm spillovers.http://www.sciencedirect.com/science/article/pii/S2405844025007868numbers: C23D24O14O31O34 |
| spellingShingle | Bongsuk Sung Dan Zhang Sang-Do Park Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms Heliyon numbers: C23 D24 O14 O31 O34 |
| title | Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms |
| title_full | Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms |
| title_fullStr | Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms |
| title_full_unstemmed | Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms |
| title_short | Public R&D support, innovation, and spillovers: A dynamic spatial panel approach to firms |
| title_sort | public r d support innovation and spillovers a dynamic spatial panel approach to firms |
| topic | numbers: C23 D24 O14 O31 O34 |
| url | http://www.sciencedirect.com/science/article/pii/S2405844025007868 |
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