This paper explores the effects of Austria's recent Special Funds initiative on the R&D expenditures of its private corporate
sector. It is the first one to approach the due evaluation from a macro perspective. First, simple descriptive statistics
show that the noticeable delays in actual disbursements and the replacement of regular RTI funds by these special funds reduce
the latter's scope. Apparently, money can't work unless it is spent and "additional" funds at the expense of regular funds
will trigger no additionalities. We then set up an econometric model to derive some inference on the relative importance of
different public support channels on the business sector's R&D spending. Though the estimates suggest that direct government
subsidies to R&D-performing firms unfold great leverage effects, the dynamics of output growth as well as an R&D-prone high-tech
industry structure seem to be more important drivers of the business sector's R&D intensity. Likewise, feeding special funds
into the higher education sector will raise the R&D-intensity of the business enterprise sector only if and to the degree
that such funds contribute to Austria's overall economic prosperity or foster structural change towards more R&D-intensive
manufacturing.
Keywords:R&D funds R&D intensity
Forschungsbereich:Industrie-, Innovations- und internationale Ökonomie