MATTHEW EFFECTS AND R&D SUBSIDIES: KNOWLEDGE CUMULABILITY IN HIGH-TECH AND LOW-TECH INDUSTRIES

MATTHEW EFFECTS AND R&D SUBSIDIES: KNOWLEDGE CUMULABILITY IN HIGH-TECH AND LOW-TECH INDUSTRIES

The paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms in high-tech and low-tech industries. It applies the distinction between vicious Matthew-effect and virtuous Matthew-effect. The former qualif...

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Bibliographic Details
Published in:Giornale degli economisti e annali di economia Vol. 71(Anno 125); no. 1; pp. 5 - 31
Main Authors: Antonelli, Cristiano, Crespi, Francesco
Format: Journal Article
Language:English
Published: UNIVERSITA COMMERCIALE LUIGI BOCCONI 01-10-2012
Subjects:
Business innovation
Economic research
Empirical evidence
Financial investments
High technology industries
Industrial sectors
Investment subsidies
Modeling
Subsidies
Technological innovation
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Summary:The paper explores the causes and effects of persistence in the discretionary allocation of public subsidies to R&D activities performed by private firms in high-tech and low-tech industries. It applies the distinction between vicious Matthew-effect and virtuous Matthew-effect. The former qualifies the persistence in the discretionary allocation of public subsidies in terms of sheer reputation based upon previous awards. The latter is identified by the role of the accumulation of competence stemming from past grants in current R&D activities. Virtuous Matthew effects are found in high-tech industries where knowledge cumulability is higher. In traditional industries, vicious Matthew effects prevail for the lower levels of knowledge cumulability. Here reputation-Matthew-effects can lead to substitution of private funds with public ones.
ISSN:0017-0097