National policies towards biotechnology

The ‘new biotechnology’ is still a very young technology - half-in, half-out of the research laboratory. This paper surveys the policies that have been emerging towards this new technology from six governments - those of the United States, Japan, the United Kingdom, France, West Germany and the Netherlands. It suggests that the publicity ‘hype’ associated with the new biotechnology firms of the U.S., and the naming of biotechnology as a ‘next generation base technology’ by the Japanese government, together played a seminal role in pressurising governments into a positive policy stance. Looking across national policies, eight common characteristics of policy are identified: substantial support for basic research; increasing emphasis on applied research; expansion of traditional policies for supporting R & D; a new emphasis on linkage between academic and industrial research; gradual convergence towards corporatist or quasi-corporatist policies; the popularity of the collaborative approach; the promotion of small firms and the venture capital market; concern with the regulatory environment.     

Evaluating innovation policies: The German experience

Until recently, evaluations of technology policy were rare in the Federal Republic of Germany. Activities of this type on a larger scale were not started until the early eighties. Most of the evaluations performed concerned government incentives for small and medium-sized enterprises (SME). The main areas of research and development (R & D) and innovation promotion in small and medium-sized firms are the improvement of the capability and propensity to do in-house R & D, intensified cooperation in R & D between industrial firms and research establishments, the provision of more venture capital, and improved technology transfer. The underlying assumption is that these firms have bottlenecks, in particular in financing, in the personnel sector, and in obtaining information. A number of the existing support programs has meanwhile been investigated; the results of these investigations are covered in this paper. Initially, the underlying concept of impact analysis is outlined. Next, examples are presented of evaluations of general R & D funding measures, of grants for specific projects, of the debate about the most suitable instruments of promoting R & D in SME, and of technology transfer. Finally, some implications arising from the results of these analyses for technology policy in the Federal Republic of Germany are discussed.     

Technology transfer, licensing and the speed of endogenous technological change

As licensing contracts usually require the licensee firm to purchase tied inputs from the seller of the technology, the licensee firm has an incentive to embark on an R&D program for development of substitutes for the tied inputs. This paper characterizes the licensee firm's optimal speed of R&D and the optimal expected date of switch-over to the substitute inputs in an infinite-horizon model under uncertainty about the timing of success of the R&D program. The effects of different government subsidies or taxes, changes in input prices and other parameters on the optimal speed of R&D and on the expected date of switchover to the substitute are also investigated. It is also shown that strategic behavior by the seller of the technology may delay the development of the substitute by the licensee firm.     

日本的R&D税收抵免制度及对我国的启示

日本是较早实施RD税收激励的国家,本文通过对日本RD税收抵免制度发展历程、RD活动及RD费用界定、税收激励的主要内容、RD支出的财税处理等进行解析,试图为我国RD税收抵免制度的完善提供可借鉴的经验。     

Growth of the Korean semiconductor industry and its competitive strategy in the world market

This paper examines the growth process by which the semiconductor industry in Korea has developed, the reasons for its remarkable growth, and the competitive strategy it has recently been pursuing to maintain its competitive edge in the world semiconductor market. The Korean semiconductor industry started from off-assembly by foreign firms in the mid-1960s and has progressed to self-development of 4M dynamic random access memory and mass production of various frontier very large scale integrated circuits, going, in turn, through embryonic, transitional, take-off and expansion, and self-supportive stages. The possession of skilled, inexpensive human resources, the given size of the domestic market, the strong commitment of entrepreneurs with large investment capability, private firms' appropriate selection and expansion of suitable business scope for its technological capability, and aggressive investment in research and development (R&D) and production facilities, together with government subsidies in R&D and manpower training and coordination of collaborative research among private firms, have facilitated the growth of the Korean semiconductor industry and enhanced its competitive position in the world semiconductor market.     

The effects of public support schemes on small and medium enterprises

In this paper we will investigate the effects of direct grants and tax incentives on recipient small and medium enterprises (SMEs). Direct grants and tax incentives are two different public instruments used to correct market failure and facilitate innovation through lowering the cost of R&D. Although large and small firms innovate in different ways, so far limited empirical evidence has been reported with respect to the effectiveness of public R&D instruments for SMEs. Our data suggests that direct subsidies used alone or with tax incentives strengthen the R&D orientation of the SME as well as some aspects of innovation output and absorptive capacity. Although the effects of policy measures are significant when comparison is made to firms that did not use any of the two instruments, not much difference is found when users of direct grants are compared to those who used both the grants and the tax incentives. This result indicates the existence of limitations in the use of tax incentives by SMEs, and thus suggests that subsidies may be the primary instrument in SMEs.     

Governance and effects of public R&D subsidies: Evidence from China

This study examines the effects of public research and development (R&D) subsidies and the governance of such subsidies on firm productivity based on the analysis of a firm-level panel dataset between 1998 and 2007 in China. It is found that public R&D subsidies tend to support more productive firms and the productivity of these government-backed firms is improved further after they get the government support. Less attention is paid to the observable or measurable performance measurements in ex-ante project selection, and the ex-post effects are stronger when the governance of the public R&D subsidies becomes more decentralized due to an exogenous policy change. In other words, better decentralization of governance is associated with more pronounced effects of R&D subsidies. Identification concerns are addressed with various approaches to confirm the treatment effect of public R&D subsidies and the governance of such subsidies.     

R&D policy in a volatile economy

The literature on R&D-based growth establishes that market equilibrium is inefficient and derives optimal R&D policy. Normative analyses of this type use the assumption of steady state, largely motivated by analytical convenience. This paper questions this steady-state approach by introducing endogenous cycles as long-run equilibria. We show that the government fails to maximize welfare if policy which is optimal in steady state is myopically applied in cyclical equilibria. More specifically, we demonstrate that (i) cycles arise in the (very) standard R&D-based model of Grossman and Helpman [1991. Innovation and Growth in the Global Economy. MIT Press, Cambridge, MA (Chapter 3)] once the model is framed in discrete time, (ii) these cycles are inefficient in the sense that they prevent welfare maximization, (iii) optimal steady-state R&D policy fails to eliminate cycles, and can even create inefficient cycles, (iv) the application of R&D subsidies leads to a trade-off between growth and macroeconomic stability, and (v) optimal R&D policy in a fluctuating economy is state-dependent, which generalizes optimal steady-state R&D policy.     

PUBLIC R&D POLICIES AND PRIVATE R&D INVESTMENT: A SURVEY OF THE EMPIRICAL EVIDENCE

The importance of R&D investment in explaining economic growth is well documented in the literature. Policies by modern governments increasingly recognise the benefits of supporting R&D investment. Government funding has, however, become an increasingly scarce resource in times of financial crisis and economic austerity. Hence, it is important that available funds are used and targeted effectively. This paper offers the first systematic review and critical discussion of what the R&D literature has to say currently about the effectiveness of major public R&D policies in increasing private R&D investment. Public policies are considered within three categories, R&D tax credits and direct subsidies, support of the university research system and the formation of high‐skilled human capital, and support of formal R&D cooperations across a variety of institutions. Crucially, the large body of more recent literature observes a shift away from the earlier findings that public subsidies often crowd‐out private R&D to finding that subsidies typically stimulate private R&D. Tax credits are also much more unanimously than previously found to have positive effects. University research, high‐skilled human capital, and R&D cooperation also typically increase private R&D. Recent work indicates that accounting for non‐linearities is one area of research that may refine existing results.     

Fostering product innovation: Differences between new ventures and established firms

This study combines insights from the entrepreneurship, competency-based view and innovation policy literature to analyze the relationships among different types of public incentives designed to foster innovation and product innovation at both new ventures and incumbent firms. To test our hypotheses, we ran a system of regression models on a cross-national sample comprised of 5238 firms from 29 European countries and found a different pattern for new ventures and incumbents. Our results suggest that support for attendance or participation in trade fairs and networking with other companies are the most effective methods of promoting product innovation for new ventures. However, for incumbent firms, we found that the most effective policies consisted of tax reduction for R&D expenditures and subsidies for acquiring buildings or other infrastructure(s) for innovation activities. This distinction prompts interesting insights related to theory development in research on entrepreneurship and innovation policy.     

Innovation dynamics and fiscal policy: Implications for growth,asset prices,and welfare

We study the equilibrium implications of different fiscal policies on macroeconomic quantities and welfare by utilizing an endogenous growth model that matches asset pricing data well. The fiscal instruments of interest are (i) subsidies to R&D expenditure, consumption and capital investment, and (ii) cuts in labor and corporate tax rates. Our equilibrium analysis provides new insights on the interplay of innovation dynamics and fiscal policy. Importantly, we find growth and welfare to be inversely related when changing R&D subsidies. However, this depends on how well the model reproduces asset pricing dynamics. Moreover, only subsidies to capital investments and cuts in the corporate tax rate have the potential to increase both growth and welfare.     

R&D subsidies and export performance of manufacturing industries

One of the main purposes of government R&D subsidies is to give domestic enterprises a competitive edge in international trade of high technology products. The empirical evidence, however, is disappointing: cross-section regression approach for six industries and five countries yielded a negative impact of R&D subsidies on exports of research intensive goods. An analysis of the distribution of public funds suggests that this poor performance could at least partially be explained by the high concordance of national technology policies and the concentration of public funds on big science projects.     

Strategy for technology development in public R&D institutes by partnering with the industry

If industry and R&D institute partner in developing the technology, there is a greater possibility for developing a commercially potential technology. Through this process, they combine tangible and intangible resources and cooperate in R&D activities. It also develops a common understanding and mutual trust and smoothens the process of adaptation of the technological innovation into a marketable product/process. This work intends to highlight the partnership process and developed a model. A survey conducted with R&D Managers of prominent companies world over and the earlier research drawn from the literature was used in developing the model for the purpose. The work also analyses the existing research interaction between industries and Indian public R&D institutes, using multi case method.     

金融化、财政激励与企业投资结构

财政激励政策对企业投资结构的调整具有重要影响。实证研究结果表明,财政激励政策会促使企业选择提升权益性投资比重,且这种促进作用具有递减倾向。其中,税收返还和财政贴息会显著促进企业权益性投资比重升高,研发补贴则会促进企业固定资产投资比重升高。进一步以企业融资效率为中介变量进行检验发现,财政激励可以通过提升企业融资效率进而促使企业提升权益性投资比重。因此,在利用财政激励政策工具调节企业投资结构时,应充分考虑企业金融化水平,以避免企业投资结构出现失衡。     

日本公营住宅的运作体系

在日本国民的实际生活中,公营住宅为解决低收入家庭的居住问题起了不容低估的作用。在政府的主导下,日本形成了以公营住宅、公团住宅、公库住宅为三大支柱的公共住宅供应体系。政府在财政、金融和税收制度上,对公营住宅采取了相应的措施,对解决日本住宅短缺问题起到了举足轻重的作用。     

The national innovation policy effect according to firm location

The regional nature of innovation and innovation policy was investigated. The aim of this study was to determine whether the specific economic and institutional conditions of a region had an influence on the results of a national policy intended to support entrepreneurial innovation. The analysis compared the effect of the national R&D subsidies on the innovation effort of firms located in central regions, which concentrate an important percentage of the national innovation activity, together with those firms located in periphery regions. Significant regional differences were detected with regard to the national R&D subsidies’ effect and distribution. The central regions manifested a higher subsidy effect compared to the periphery regions. The results of this study have allowed us to conclude that the region plays an important differentiating role in connection with the final result of the innovation policy aimed at the entire national territory. Therefore, this study recommends including the geographical location of the firm in future evaluations.     

Environmental regulations in private and mixed duopolies: Taxes on emissions versus green R&D subsidies

In this article, we compare two kinds of environmental regulations—emissions taxes and green R&D subsidies—in private and mixed-duopoly markets in the presence of R&D spillovers. We show that a green R&D subsidy is better (worse) than an emissions tax when the green R&D is efficient (inefficient), irrespective of R&D spillovers, whereas the existence of a publicly owned firm encourages the government to adopt a subsidy policy. We also show that the optimal policy choice depends on R&D efficiency and spillovers. In particular, when green R&D is inefficient and the spillover rate is low (high), the government should choose an emissions tax and (not) privatize the state-owned firm. When green R&D is efficient, however, an R&D subsidy is better, but a privatization policy is not desirable for society, irrespective of spillovers.     

Are fiscal policy incentives effective in stimulating firms' eco-product innovation? The moderating role of dynamic capabilities

This study investigates the effectiveness of fiscal policy incentives—in particular, direct subsidies and tax credits—in stimulating eco-product innovation among Chinese manufacturing firms. We also examine the moderating effects of dynamic capabilities. The empirical results, which are based on survey data from 265 firms in China, demonstrate that both direct subsidies and tax credits are conducive to firms' eco-product innovation. In addition, we find that when firms' dynamic integration capabilities are strong, the facilitating effects of direct subsidies and tax credits on eco-product innovation are likewise strong. Moreover, dynamic reconfiguration capabilities positively moderate the relationship between tax credits and eco-product innovation. By identifying moderators that influence the effect of fiscal incentives on eco-product innovation in heterogeneous firms, this study contributes to fiscal policy debates and realizing sustainable development.     

ASSESSING THE EFFECT OF PUBLIC SUBSIDIES ON FIRM R&D INVESTMENT: A SURVEY

This survey examines the empirical literature on the relationship between public R&D subsidies and private R&D investment over the past five decades. The survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues. We aim to provide further explanations of the possible causes of that heterogeneity. In particular, we emphasise a set of issues that, in our view, are critical to understanding the potential effect of public R&D subsidies on private R&D spending. Special attention is paid to the dynamic aspects and composition of firm R&D, the constraints faced by the firm (such as financial constraints), and the amount and source of public subsidies. None of these issues have been investigated in depth. We formulate a set of research assumptions to guide future empirical research in this field.     

The housing question in Japan

This article first examines how bad housing conditions are in Japan based on international comparisons. The next question is whether the extremely high land prices in Japan can be explained by economic logic. We then turn to more specific housing policy questions that are peculiar to or important in Japan, such as the tax advantages of owning land that have caused under-utilization of land and the reasons why the average size of Japanese rental housing is so small.