Financing constraints, fixed capital and R&D investment decisions of belgian firms

This paper aims at assessing the relationship between the possible existence of financial constraints and the decisions of Belgian private firms as regards their investments in both capital and R&D investments over the last decade. The main system GMM estimates from the error-correction equations indicate that the sensitivity of both types of investments to cash flow variations are rather differentiated. On the whole, these effects are more important for investments in ordinary assets, young small-scale firms located in the Walloon region that are not part of a multinational. Firms that perform R&D on a permanent basis and that receive public funds to support these activities appear to be less cash constraints.financial constraints, investments in capital and R&D, Belgian private companies, error-correction investment equations, system GMM panel data econometric models

Impact of Market Entry and Exit on EU Productivity and Growth Performance

The European Union and its Member States have been engaged in product market reforms over a long period with notable reforms including the Single Market Program and the Lisbon Agenda launched in March 2000. Product market reforms are seen as exerting both a direct and an indirect impact on productivity, however, the net effects of the direct effect were found to be small. This study concentrates on the impact of product market reforms on firm entry and exit that can itself be decomposed into two effects: internal restructuring which refers to productivity growth of individual firms present in the industry and external restructuring whereby the process of market selection leads to a reallocation of resources among individual firms. The change in firm entry and exit will in turn affect macroeconomic performance.Market entry and exit, product market reforms, macroeconomic performance

DOMESTIC VERSUS INTERNATIONAL R&D SPILLOVERS AND PRODUCTIVITY PERFORMANCE OF LARGE INTERNATIONAL FIRMS

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Impact of market entry and exit on EU productivity and growth performance

The European Union and its Member States have been engaged in product market reforms over a long period with notable reforms including the Single Market Program and the Lisbon Agenda launched in March 2000. Product market reforms are seen as exerting both a direct and an indirect impact on productivity, however, the net effects of the direct effect were found to be small. This study concentrates on the impact of product market reforms on firm entry and exit that can itself be decomposed into two effects: internal restructuring which refers to productivity growth of individual firms present in the industry and external restructuring whereby the process of market selection leads to a reallocation of resources among individual firms. The change in firm entry and exit will in turn affect macroeconomic performance.market entry, market exit, productivity, product market reform, performance growth, Cincera, Galgau

Young leading innovators and EUÂ?s R&D intensity gap

Innovation in the European Union remains weak and there are relatively few signs of progress. In this policy contribution, Reinhilde Veugelers and Michele Cincera give evidence to show that compared to the US, the EU has fewer young firms among its leading innovators and the primary driver of this private R&D gap is due to the fact that young leading innovators in the EU are less R&D intensive than their US counterparts. This paper complements the Bruegel policy brief, EuropeÂ?s missing yollies.

Efficiency of public spending in support of R&D activities

This study provides an empirical assessment of the level of efficiency of public R&D spending and public R&D support for private R&D. This study aims at assessing the level of efficiency of public R&D spending and public R&D support for private R&D and to compare efficiency scores among OECD countries, in particular EU Member states over the past two decades. The analysis rests on the concept of efficiency which is based on the relationship between public R&D spending and the additional R&D in the business sector induced by such measures.Public, private R&D, (determinants of) efficiency, framework conditions, SFA, DEA.

ERAWATCH Country Reports 2012: Belgium

This analytical country report is one of a series of annual ERAWATCH reports produced for EU Member States and Countries Associated to the Seventh Framework Programme for Research of the European Union (FP7). The main objective of the ERAWATCH Annual Country Reports is to characterise and assess the performance of national research systems and related policies in a structured manner that is comparable across countries. The Country Report 2012 builds on and updates the 2011 edition. The report identifies the structural challenges of the national research and innovation system and assesses the match between the national priorities and the structural challenges, highlighting the latest developments, their dynamics and impact in the overall national context. They further analyse and assess the ability of the policy mix in place to consistently and efficiently tackle these challenges. These reports were originally produced in December 2012, focusing on policy developments over the previous twelve months. The reports were produced by independent experts under direct contract with IPTS. The analytical framework and the structure of the reports have been developed by the Institute for Prospective Technological Studies of the Joint Research Centre (JRC-IPTS) and Directorate General for Research and Innovation with contributions from external experts.JRC.J.2-Knowledge for Growt

Which projects are selected for an innovation subsidy? The Portuguese case

Several empirical studies have analyzed which firm characteristics influence government evaluators in the decision to select specific firms to participate in Research and Develop- ment and Innovation subsidy programs. However, few authors have provided a precise analysis about the selection process of applications submitted for public support. The aim of the present article is to assess differences in investment project characteristics (expected impact) between firms with approved and non-approved applications and to understand which kinds of projects are selected for a subsidy. The analysis is focused on the case study of applications submitted to the Portuguese Innovation Incentive System (SI Innovation) between 2007 and 2013. The impact variables under study are those used in the selection procedure to grant the firm a subsidy, namely the expected impact on exports, value creation, productivity, patent application and qualified employment. Using a counterfactual analysis and Propensity Score Matching estimators, the results show that firms with approved applications are those that expect to invest more and forecast a higher increase in exports and productivity as the result of the investment project. However, these firms in comparison with the control group (those with non-approved applications) have investment projects with a lower contribution to growth and lower economic efficiency (return on investment in terms of productivity). The conclusions of this study could be useful for policy-makers since it provides evidence about firms’ strategic choice concerning investment projects submitted for an Innovation subsidy.info:eu-repo/semantics/publishedVersio

The 2009 EU Survey on R&D Investment Business Trends

This report presents the findings of the fifth survey on trends in business R&D investment. These are based on 185 responses of mainly larger companies from the 1000 EU-based companies in the 2008 EU Industrial R&D Investment Scoreboard. These 185 companies are responsible for R&D investment worth almost ¿48 billion, constituting over a third of the total R&D investment by the 1000 EU Scoreboard companies in 2008. The main findings of the survey are as follows: The companies¿ R&D investment is expected to grow by 2% annually over 2010-12, half the amount expected according to last year¿s survey, reflecting the ongoing effects of the economic crisis. More than half of the respondents made changes to the management of their R&D investments as a result of the economic crisis. Around 40% of the respondents said there was no change. The companies, all EU-based, expect strong R&D investment increases outside the EU, especially in China and India. The resulting R&D investment outflow implies sustained but smooth changes in R&D investment shares in world regions. Tax incentives appear to be particularly important for high R&D intensive companies. With respect to last year's survey, these companies also attach a great deal of importance to regulatory intervention to improve product markets and framework conditions, aligning their views with the rest of the sectors. European Technology Platforms appear to be more relevant to low R&D intensity sectors. R&D is the most important component of innovation for the companies which invest most in R&D. In low R&D intensity sectors, greater increases in innovation investments are expected.JRC.DDG.J.3-Knowledge for Growt

“Productivity and Employment in Firm’s Acess to Public Funding to Support Innovation”

Innovation is at the heart of the Europe 2020 Strategy, in order to promote higher levels of employment and productivity. Special attention is given to increasing the effectiveness of innovation policy instruments, mainly as some authors found evidence that productivity could be negatively affected by subsidies. The aim of the study is to assess how the expected impact on firm productivity and employment is taken into account, when firms apply for public funding for innovation. The analysis is based on the case study of the Portuguese Innovation Incentive System in the Alentejo region. In order to understand which factors influence the public decision to financially support private investment, we estimated a logit model based on firms’ and applications’ characteristics, controlling for the macroeconomic environment. The results indicate that government preferences for promoting exports, exploiting firms R&D results and stimulating the level of qualified employment are shown to be more relevant than the impact on firm productivity. Furthermore, the cost to the government of new jobs created, measured at least by exemption of interest and financial charges on the loan, is almost twice as much for non-SMEs as for SMEs