Abstract
In this study, different versions of the Innovation Surveys carried out in Chile are used to evaluate the factors that would explain the obtaining of public funding for innovative activities. In order to achieve this, the estimated results from binary election models are contrasted with cross-sectional and pseudo-panel data. It is concluded that with pseudo-panel data it is possible to identify some relevant factors not observed with cross-sectional data, for example those firms that invest in training their workers in R&D activities in the previous year have lower probabilities of obtaining public funding. In addition, the foreign firms have greater probabilities of achieving funding than national firms. The most striking result is that larger firms have greater probability of obtaining public funding, which is contradictory when considering that many public programs declare that they are aimed to support SMEs.
Highlights
Public funds for R&D are associated to tax benefits that involve automatic procedures or subsidies obtained through competitive funds that are based on an evaluation of proposal formulated by the applicant firms
Model 1 only includes as explanatory variables the different types of expenses in innovative actions performed in the previous year; model 2 controls by total sales performed in the previous year, number of workers in the previous year and the export experience in the previous year; model 3 controls by economic sectors; model 4 adds a control by region of location of the firms; model 5 controls by firm size; and model 6 controls by type of ownership
It can be concluded that using pseudo-panel information allows identifying factors that affect the probability of obtaining public support, which are not identified when only cross-sectional information is used
Summary
Public funds for R&D are associated to tax benefits that involve automatic procedures or subsidies obtained through competitive funds that are based on an evaluation of proposal formulated by the applicant firms. In Chile, R&D expenditure as a percentage of the Gross Domestic Product (GDP) was 0.4%, which is low compared to other Latin American countries such as Argentina (0.6%) and Brazil (1.2%). This gap is even higher when compared with the average R&D expenditure of the OECD member countries (2.4%). In recent years the Chilean State has had a more active role through the creation of diverse programs and incentives that promote innovative projects and strengthen the entrepreneurial capacities. In the different versions of the Innovation Survey only the well-known support
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