Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach
Innovators and investors often claim that there is a “funding gap” or “valley of death” in the middle phase of the process between basic research and commercialization of a new product. This gap or valley has a significant impact on the productivity of financial incentives to support R&D activit...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2020-03-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_11901_27d4e8b781ab99a1deab5062d92b5d05.pdf |
| _version_ | 1827398311364001792 |
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| author | Rogayeh Nazari Godratoallah Emamverdi |
| author_facet | Rogayeh Nazari Godratoallah Emamverdi |
| author_sort | Rogayeh Nazari |
| collection | DOAJ |
| description | Innovators and investors often claim that there is a “funding gap” or “valley of death” in the middle phase of the process between basic research and commercialization of a new product. This gap or valley has a significant impact on the productivity of financial incentives to support R&D activities to move the technology toward commercialization. Financial incentives include tax incentives, subsidies, grants, and other incentives. Each company faces the marginal rate of return and the marginal cost of capital for R&D expenditures, which are influenced by public R&D policies. This research aims to apply the complexity of the microeconomic conceptual framework into a regional form using CES functions. Therefore, three regions of Europe (OECD), South East Asia and Central Asia are selected to compare the effects of financial incentives. For this purpose, spatial dynamic panel models for the period 2005–2016 is used. By confirming the SDM model, government fiscal incentives have internal, external and total impacts as supportive policies that can stimulate R&D activities and their funding. The positive and significant total effect of tax incentives on R&D was confirmed in OECD countries and positive external influence was affirmed in South East Asia, but for Central Asian countries, the effect of tax incentives was not confirmed. There is also an interactive (substitution) relationship between direct support and tax incentives in OECD countries. This relationship is complementary to South East Asia and Central Asia countries. |
| first_indexed | 2024-03-08T19:26:45Z |
| format | Article |
| id | doaj.art-b48a5a759773472c86d9738cd0ea439e |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:26:45Z |
| publishDate | 2020-03-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-b48a5a759773472c86d9738cd0ea439e2023-12-26T08:03:18ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532020-03-0120768112710.22054/joer.2020.1190111901Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models ApproachRogayeh Nazari0Godratoallah Emamverdi1Assistant Professor, Department of Economics, Islamic Azad University- Mamaghan Branch, Azarbayejan GharbiAssistant Professor, Department of Economics, Islamic Azad University-Central Tehran BranchInnovators and investors often claim that there is a “funding gap” or “valley of death” in the middle phase of the process between basic research and commercialization of a new product. This gap or valley has a significant impact on the productivity of financial incentives to support R&D activities to move the technology toward commercialization. Financial incentives include tax incentives, subsidies, grants, and other incentives. Each company faces the marginal rate of return and the marginal cost of capital for R&D expenditures, which are influenced by public R&D policies. This research aims to apply the complexity of the microeconomic conceptual framework into a regional form using CES functions. Therefore, three regions of Europe (OECD), South East Asia and Central Asia are selected to compare the effects of financial incentives. For this purpose, spatial dynamic panel models for the period 2005–2016 is used. By confirming the SDM model, government fiscal incentives have internal, external and total impacts as supportive policies that can stimulate R&D activities and their funding. The positive and significant total effect of tax incentives on R&D was confirmed in OECD countries and positive external influence was affirmed in South East Asia, but for Central Asian countries, the effect of tax incentives was not confirmed. There is also an interactive (substitution) relationship between direct support and tax incentives in OECD countries. This relationship is complementary to South East Asia and Central Asia countries.https://joer.atu.ac.ir/article_11901_27d4e8b781ab99a1deab5062d92b5d05.pdfresearch and development (r&d)budget gap financingdirect support and tax incentivesdynamic space panel models |
| spellingShingle | Rogayeh Nazari Godratoallah Emamverdi Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī research and development (r&d) budget gap financing direct support and tax incentives dynamic space panel models |
| title | Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach |
| title_full | Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach |
| title_fullStr | Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach |
| title_full_unstemmed | Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach |
| title_short | Financing the “Valley of Death” Budget Gap in Research and Development: Spatial Models Approach |
| title_sort | financing the valley of death budget gap in research and development spatial models approach |
| topic | research and development (r&d) budget gap financing direct support and tax incentives dynamic space panel models |
| url | https://joer.atu.ac.ir/article_11901_27d4e8b781ab99a1deab5062d92b5d05.pdf |
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