The public funding of innovation in agri-food businesses

Abstract

Public administrations have in recent years developed programs of public funding for innovation to boost the competitiveness of business. The study of how companies have used these funding sources generates knowledge to improve the design of support for private innovation and to provide advice for innovative companies. This paper investigates these issues in the agri-food sector which is of particular interest as it is comprised mainly of small and medium enterprises with a wide regional presence and interaction with their local environment. A survey on technological innovation was used to estimate panel logit models with random effects, taking as dependent variables three types of funding: regional, state and European Union. The results generally show a positive relationship between innovation efforts and access to public funding, but also significant differences between types of funding and between sectors. Food companies that obtain public funding tend to have a more innovative profile than Agriculture ones. Both types of firm present higher probabilities than others companies when it comes to gaining access to regional funding, though the opposite often occurs in the case of state funding. Firm size is not significant for regional funding and no overlap was detected between regional and state funding. The financial crisis has adversely affected regional and national aid, which experienced a significant decrease in the period from 2008 to 2013.

Keywords

• innovation policy
• subsidies
• random panel logit