2020/32 | LEM Working Paper Series | ||||||||||||||||
![]() |
|||||||||||||||||
Does mission-oriented funding stimulate private R&D? Evidence from military R&D for US states |
|||||||||||||||||
Gianluca Pallante, Emanuele Russo and Andrea Roventini |
|||||||||||||||||
Keywords | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
R&D; Innovation policy; Defense; Mission-oriented innovation.
|
|||||||||||||||||
JEL Classifications | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
O30, O31, 032, O38. H56, H57
|
|||||||||||||||||
Abstract | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
US military Research and Development (R&D) expenditures arguably represent the best example of mission-oriented policy.
They are sizeable, with a clear-cut public purpose (national defense) and with the government being their exclusive beneficiary.
Exploiting a longitudinal dataset linking public R&D obligations to private R&D expenditures for US states, we investigate the
impact of defense R&D on privately-financed R&D. To address potential endogeneity in the allocation of funds, we use an instrumental
variable identification strategy leveraging the differential exposure of US states to national shocks in federal military R&D.
We document considerable "crowding-in" effects with elasticities in the 0.11-0.14 range. These positive effects extend also to
the labor market, when focusing on employment in selected R&D intensive industries and especially for engineers.
|
Downloads
|
![]() ![]() |
|
![]()
|
![]() |