Abstract
This paper examines the effect of product market uncertainty and government research and development (R&D) subsidies on firm-level R&D investment. Using a sample of German manufacturing firms, we find that product market uncertainty reduces R&D investment and government R&D subsidies increase R&D investment. Moreover, our results indicate that R&D subsidies mitigate the effect of product market uncertainty on R&D investment. These findings suggest that public policies aimed at increasing business R&D investment can achieve this objective by reducing the degree of uncertainty in the product market.
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Czarnitzki, D., Toole, A.A. Business R&D and the Interplay of R&D Subsidies and Product Market Uncertainty. Rev Ind Organ 31, 169–181 (2007). https://doi.org/10.1007/s11151-007-9152-x
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DOI: https://doi.org/10.1007/s11151-007-9152-x