Original scientific paper
https://doi.org/10.15179/ces.27.2.1
Enhancing Private Sector R&D Investment in OECD Countries: The Role of Government Funding
Tatia Zarkua
orcid.org/0000-0001-7831-1499
; Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic
*
Wim Heijman
; Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic
Irena Benešová
orcid.org/0000-0002-9381-063X
; Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic
* Corresponding author.
Abstract
This study examines the effect of government funding on private-sector research and development (R&D) expenditure across 33 OECD countries from 2005 to 2019. Additionally, the analysis extends to subgroups of countries, including the EU-15, newly joined EU members, other European non-EU countries, and non-European OECD countries. To empirically assess this relationship, we employ both pooled ordinary least squares (OLS) regression and instrumental variable two-stage least squares (IV-2SLS) models. The findings indicate that government support fosters a complementary relationship with private-sector R&D expenditure, rather than a crowding-out effect. This suggests that both direct government funding and R&D tax incentives play a crucial role in boosting private-sector R&D investment, with the effects varying across different economic and institutional contexts. By offering a comprehensive cross-country perspective, this research highlights the differential effectiveness of R&D support mechanisms in OECD countries and contributes to a deeper understanding of how government funding can enhance private-sector R&D investment.
Keywords
R&D policies; OECD; economic development; knowledge-based economy
Hrčak ID:
343927
URI
Publication date:
30.1.2026.
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