Public support for R&D, knowledge sourcing and firm innovation: Examining a mediated model with evidence from the manufacturing industries

Abel Lucena and Sergio Afcha

CENTRUM Católica’s Working Paper No. 2014-06-0002



The aim of this study is to examine how firms realize the benefits associated with public support for R&D programs. To do so, this research proposes and tests the hypothesis that the level of knowledge sourcing applied by a firm during the innovation process mediates the relationship between granted R&D subsidies and a firm’s innovative performance. Using a panel of Spanish manufacturing companies, the findings provide evidence to indicate that the degree of firms’ investments in intramural R&D and the levels of openness in their innovation serve as mediating mechanisms between R&D subsidies and firm innovation, as measured by patent application and new product introduction counts. The study advances the literature on innovation management and technology-policy evaluation by showing how firms use their knowledge-sourcing strategies to exploit opportunities provided by public intervention.

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