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Public R&D investment in economic crises

Author

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  • Pellens, Maikel
  • Peters, Bettina
  • Hud, Martin
  • Rammer, Christian
  • Licht, Georg

Abstract

We study the cyclicality of public R&D in 28 OECD countries (1995-2017). While procyclical on average, public R&D reacts asymmetrically over different phases of the business cycle and becomes acyclical during recessions. It is also heterogeneous across countries: Innovation leaders and followers behave countercyclically during recessions while moderate innovators behave procyclically. Furthermore, the share of public R&D allocated to the business sector is countercyclical, but the thematic composition remains stable. These results, not driven by countries' financial constraints, imply that countries behind the innovation frontier might strengthen their resilience to economic crises by adopting countercyclical R&D strategies.

Suggested Citation

  • Pellens, Maikel & Peters, Bettina & Hud, Martin & Rammer, Christian & Licht, Georg, 2020. "Public R&D investment in economic crises," ZEW Discussion Papers 20-088, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:20088
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    References listed on IDEAS

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    Cited by:

    1. Ioannis Giotopoulos & Alexander S. Kritikos & Aggelos Tsakanikas, 2023. "A lasting crisis affects R&D decisions of smaller firms: the Greek experience," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1161-1175, August.
    2. Ana María Gómez-Aguayo & Joaquín M. Azagra-Caro & Carlos Benito-Amat, 2024. "The steady effect of knowledge co-creation with universities on business scientific impact throughout the economic cycle," Scientometrics, Springer;Akadémiai Kiadó, vol. 129(5), pages 2771-2799, May.
    3. Gehrke, Birgit & Schasse, Ulrich & Belitz, Heike & Eckl, Verena & Stenke, Gero, 2020. "Forschung und Entwicklung in Staat und Wirtschaft: Deutschland im internationalen Vergleich," Studien zum deutschen Innovationssystem 2-2020, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.

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    More about this item

    Keywords

    R&D; Public Policy; Business Cycle;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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