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R&D subsidies and productivity in eastern European countries

Foreman-Peck, James ORCID: and Zhou, Peng ORCID: 2022. R&D subsidies and productivity in eastern European countries. Economic Systems 46 (2) , 100978. 10.1016/j.ecosys.2022.100978

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This paper shows that R&D subsidy policies at the European Union (EU) and national levels stimulated labor productivity in Central and Eastern European countries (CEEC) in the years after their entry to the EU. However, the average impact of national funding on labor productivity was higher for countries in the Western control group than in the CEEC sample. EU R&D subsidies compensated the CEEC in part for the greater innovation impact of Western economies. Although they crowded out some R&D subsidies by local governments at the country level, the EU subsidies crowded in many national and local subsidies at the firm level. Local/regional state innovation aid to enterprises encouraged no increase in labor productivity in all but one of the sample CEEC countries. These impacts are assessed in a sequential structural econometric model estimated using Eurostat’s collection of Community Innovation Surveys covering the years 2006–2014.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Additional Information: This is an open access article under the terms of the CC-BY Attribution 4.0 International license.
Publisher: Elsevier
ISSN: 0939-3625
Date of First Compliant Deposit: 16 February 2022
Date of Acceptance: 9 February 2022
Last Modified: 20 May 2023 06:09

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