Abstract
The objective of this paper is twofold: first, to analyze the determinants of firms’ applications for low-interest credits to finance their research and development projects; and second, to study the award decision by the public agency. The results obtained for a sample of Spanish firms suggest that young firms, exporters, companies that belong to a high or medium-tech industry, and especially firms with previous experience in similar programs have a higher probability of applying for a credit. As for the award process, the most important effects are related to the technological and economic potential of the proposal, providing evidence that the agency tries to select the best projects.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Arrow K. J. (1962) Economic welfare and the allocation of resources for innovation. In: Nelson R. (Ed.) The rate and direction of inventive activity. Princeton University Press, Princeton
Barajas A., Huergo E. (2010) International R&D cooperation within the EU framework programme: Empirical evidence for Spanish firms. Economics of Innovation and New Technology 19(1–2): 87–111
Blanes J. V., Busom I. (2004) Who participates in R&D subsidy programs? The case of Spanish manufacturing firms. Research policy 33(10): 1459–1476
Bond, S., Harhoff, D., & Van Reenen J. (2003). Investment, R&D and Financial Constraints in Britain and Germany. CEP Discussion Papers dp0595, Centre for Economic Performance, LSE.
Busom I. (2000) An empirical evaluation of the effects of R&D subsidies. Economics of Innovation and New Technology 9(2): 111–148
CDTI (2002). Annual Report 2002. Madrid: Center for the Development of Industrial Technology.
Clausen, T. H. (2007). Access (not) granted: What kinds of firms participate in technology programs? TIK Working paper on Innovation Studies No. 20070612. Oslo.
Clausen, T. H. (2008). Do subsidies have positive impacts on R&D and innovations activities at the firm level? TIK Working papers on Innovation Studies No. 20070615. Oslo.
Colombo M. G., Grilli L. (2007) Funding gaps? Access to bank loans by high-tech start-ups. Small Business Economics 29: 25–46
Czarnitzki D., Licht G. (2005) Additionality of public R&D grants in a transition economy: The case of Eastern Germany. The Economics of Transition 14(1): 101–131
Dosi G. (1997) Opportunities, incentives and the collective patterns of technological change. The Economic Journal 107: 1530–1547
Duguet E. (2004) Are R&D subsidies a substitute or a complement to privately funded R&D? Evidence from France using propensity score methods for non-experimental data. Revue d’Economie Politique 114(2): 263–292
Freel M. S. (2007) Are small innovators credit rationed?. Small Business Economics 28: 23–35
González X., Jaumandreu J., Pazó C. (2005) Barriers to innovation and subsidy effectiveness. The Rand Journal of Economics 36(4): 930–949
Hall B. (2002) The financing of research and development. Oxford Review of Economic Policy 18: 35–51
Hall B. H., Mairesse J., Branstetter L., Crepon B. (1999) Does cash flow cause investment and R&D: An exploration using panel data for French, Japanese and United States scientific firms. In: Audretsch D., Thurik A. R. (eds) Innovation, industry evolution and employment. Cambridge University Press, Cambridge
Heckman J. J. (1979) Sample selection bias as a specification error. Econometrica 47: 153–162
Heijs J. (2005) Identification of firms supported by technology policies: The case of Spanish low interest credits. Science and Public Policy 32(3): 219–230
OECD (2006). Government R&D funding and company behaviour. Measuring behavioural additionality. OECD report.
Ortega-Argilés R., Vivarelli M., Voigt P. (2009) R&D in SMEs: A paradox?. Small Business Economics 33: 3–11
Takalo, T., Tanayama, T. & Toivanen, O. (2008). Evaluating innovation policy: A structural treatment effect model of R&D subsidies. Bank of Finland Research, Discussion Papers 7/2008.
Van de Ven W. P. M. M., Van Praag B. M. S. (1981) The demand for deductibles in private health insurance. A probit model with sample selection. Journal of Econometrics 17: 229–252
Wallsten S. J. (2000) The effects of government-industry R&D programs on private R&D: The case of the small business innovation research program. The Rand Journal of Economics 31(1): 82–100
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Huergo, E., Trenado, M. The Application for and the Awarding of Low-Interest Credits to Finance R&D Projects. Rev Ind Organ 37, 237–259 (2010). https://doi.org/10.1007/s11151-010-9263-7
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11151-010-9263-7