Tuesday, 1st April 2025 at 13.00-14.00 Narva Rd 18 - 1017 and Zoom

Image

KEVIN MULLIGAN (Queen’s University Belfast)

Government funding for firm-level R&D: Recent developments and future research agenda

A large body of academic studies and government policy reports suggest that public funding for firm-level R&D plays a key role in driving business innovation. However, several recent developments have created a new research agenda within this literature. Factors such as the R&D policy instrument mix sequencing and the region-specific R&D impacts have become increasingly important for understanding how public R&D support drives business innovation. Until recently, most studies conceptualised the R&D policy instrument mix as a static unit, whereby firms receive, for example, an R&D grant and an R&D tax credit at the same point in time. However, firms can also receive different R&D policy instruments in a sequence over time. In addition, firms located in certain regions benefit from unique advantages such as a critical mass of Universities, science labs and clusters of innovation-intensive firms. This R&D infrastructure produces unique knowledge spillovers that are unavailable to firms located in other regions. Such region-specific knowledge spillovers may supercharge the effectiveness of government R&D support provided to firms, thus widening the gap between more- and less-R&D/innovation intense regions further. Notwithstanding their importance, relatively little research focuses these key issues. This presentation examines these recent developments, using firm-level data to set out a research agenda that offers insights for both academics and policymakers alike.

Recent publication: Lenihan, H., Mulligan, K., Perez-Alaniz, M., & Rammer, C. (2024). R&D policy instrument mix sequencing: evaluating the impact of receiving R&D grants and R&D tax credits over time on firm-level R&D. Industry and Innovation, 1-34. https://doi.org/10.1080/13662716.2024.2388650