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Impacts of the Brazilian science and technology sectoral funds on the industrial firms’ R&D inputs and outputs

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Repositório Institucional da Universidade de Brasília
  • Fundos Setoriais
  • Finanças Públicas
  • Lei De Inovação Tecnológica
  • Desenvolvimento
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The Brazilian science and technology sectoral funds were established at the end of the 1990s, aiming at providing more stable financial resources to science, technology, and innovation (ST&I) activities in the country. Similarly to other instruments used to foster innovation at the firm level, the sectoral funds are expected to increase firms’ technological efforts as well as their result indicators. The aim of this paper is to evaluate the impacts of these funds on the industrial firms’ R&D inputs and outputs in Brazil during the period between 2001 and 2006. Several papers have discussed the additionality or crowding out effects of innovation policies that involve grants and fiscal incentives, for example. In this paper, the firms which accessed the sectoral funds are compared with the ones which did not, based upon the path followed by their indicators of technological efforts (R&D inputs) and results (R&D outputs). The control group was defined using a Propensity Score Matching (PSM) procedure aiming at reducing the selection bias that makes firms which accessed the funds follow a different path when compared to the ones that did not. Percentage differencein- differences indicate a significant detachment between the technological efforts of the treatment and control groups and permit the hypothesis of crowding out to be rejected. The growth differential on the PoTec variable – the proxy for technological efforts – is estimated in 6.8 p.p. in the first year, 11.5 in the second, 15.7 p.p. in the third and 26.7 p.p. in the fourth year after the access to the funds. The sectoral funds also presented a significant and positive impact on the number of employees, although only a marginally significant impact on high-tech exports was observed four years after the treatment. Additionally, a preliminary analysis of the impacts of the different instruments that form the sectoral funds suggests that most impacts observed in the technological efforts can be associated to the credit at favorable conditions.

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