2012/14 | LEM Working Paper Series | |
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Strategic interactions in public R&D across EU-15 countries: A spatial econometric analysis |
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Hakim Hammadou, Sonia Paty, Maria Savona |
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Keywords | ||
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Public spending strategic interactions, Public R&D expenditures,
National Systems of Innovation, Complementarity public and private
R&D, Spatial interactions, EU countries, spatial dynamic panel data
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JEL Classifications | ||
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H5, O3
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Abstract | ||
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The aim of this paper is to test the presence of strategic
interactions in government spending on Research and Development (R&D)
among EU-15 countries. We add to the literature on public choice
strategic interactions in general, and to work on R&D spending in
particular. We take account of traditional and some overlooked factors
related to countries' public R&D spending, including (i) the
international context - i.e. Lisbon strategy; (ii) country
characteristics - the National System of Innovation, and more
specifically national similarities in relation to (a) trade and
economic size and (b) sectoral specialization. Sectoral specialization
is likely to affect government spending, depending on the mechanisms
of complementarity or substitution between public and private
R&D. Using a spatial dynamic panel model in which spatial matrices are
specified both in terms of traditional Euclidean distance, and
sectoral specialization proximity, we confirm the existence of
strategic interactions on R&D spending among European countries with
similar economic size, international trade and sectoral
structure. Unlike the results emerging from the literature on
strategic interactions in public choice, geographic proximity seems
not to affect interactions related to public spending on R&D.
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