Finance growth nexus across Indian states: evidences from panel cointegration and causality tests

The paper deals with finance-growth relationship across Indian states over 1980–2011 in panel cointegration and causality framework. We apply Engle–Granger two-step procedure for cointegration test in panel setting which takes care of cross-sectional dependence and heterogeneity across states. For panel Granger causality analysis, we employ Dumitrescu and Hurlin (Econ Model 29:1450–1460, 2012) method and apply bootstrapping to account for cross-sectional dependence. We find robust evidence of cointegration between per capita income and credit per capita. Using panel FMOLS, we find that 1 % change in credit per capita results in 0.14 % change in per capita income. Panel Granger causality test reveals that there is bi-directional causality (feedback effects) in the absence of cross-sectional dependence. However, with cross-sectional dependence, we find evidence in favour of supply leading hypothesis. Probable policy implication calls for inclusive financial development and growth strategies in order to mitigate uneven income levels across states.     

Assessing the relationship between R&D subsidy,R&D cooperation and absorptive capacity: an investigation on the manufacturing Spanish case

Private companies want to eliminate outgoing spillovers while policymakers seek to maximize them. With subsidized R&D cooperation agreements both agents partially achieve their objectives. For this reason, in Europe, policymakers grant subsidies for R&D activities with the condition of establishing R&D cooperation agreements. This study explores the relationship of complementarity between R&D subsidy, R&D cooperation and absorptive capacity in the context of its contribution to labor productivity of enterprises. The data used comes from the Technological Innovation Panel (PITEC), managed by the Spanish National Statistics Institute. We selected manufacturing companies in the period 2008–2013. We evaluate the existence of complementarity through the systems approach and the interaction approach. The econometric technique that we used to estimate the coefficients of our empirical model was maximum-likelihood random effects. As a consequence of the low absorptive capacity of Spanish manufacturing firms we find that R&D subsidies and R&D cooperation agreements are not complementary variables, i.e., receiving public subsidies as a result of establishing R&D cooperation agreements has a lower impact on productivity than the sum of the individual impacts of R&D cooperation and R&D subsidies. In consequence, this result calls into question the convenience of using subsidized R&D cooperation agreements as a tool for promoting innovation in EU countries as there are notable differences between the companies in these countries in terms of absorption capacity.     

What the design of an R&;D tax incentive tells about its effectiveness: a simulation of R&;D tax incentives in the European Union

Most industrialized countries apply special tax incentives to boost the R&D expenditures of firms. This study considers the design of such R&D tax incentives as applied in the European Union and simulates its effect on the post-tax R&D expenditures of firms in different industries and different profit/loss-situations by means of the simulation model European Tax Analyzer. Any restrictions and progressive tax incentives are explicitly taken into account. Our results indicate that for designing and measuring public support to R&D it is often not sufficient to focus only on tax rate effects of R&D tax incentives and the design of a tax incentive must be in accordance with the framing tax system in order to be effective. As soon as there are any limitations in place, our results suggest a considerably lower impact of R&D tax incentives on the post-tax R&D expenditures than the commonly used B-Index by the OECD. The results clearly illustrate the beneficial impact of immediate cash refunds for unused tax incentives.     

Measurement and Growth of R&D Within the Service Economy

Twenty-five years ago, industrial performance of research and development (R&D) was primarily an activity undertaken by large traditional manufacturing firms. Only about 3 percent of the R&D conducted in industrial labs was done by service sector firms. By the late 1990s, however, such firms accounted for approximately 30 percent of the Nation's total industrial R&D expenditures, with a fairly large amount of the effort being directed toward the development and use of information technologies. Industry's increasing reliance on research and technology outsourcing also apparently has contributed to the service sector's substantial R&D expansion. This paper documents recent trends in US non-manufacturing R&D expenditures, highlighting their growth and focus and the difficulties in measuring these trends, as available from national R&D statistics. Broad comparisons with trends and concerns identified through other countries' surveys of service sector R&D are presented.     

Competition and R&D cooperation with universities and competitors

This paper analyses the relationship between competitive environment and R&D cooperation with universities and competitors. Our simple model suggests that cooperation creates benefits in terms of synergies but also induces costs due to spillovers. Since the value of these synergies and spillovers depends on the competitive pressure, cooperation propensity depends on the competitive environment. Differentiating between the dimensions of competition, we hypothesize that university cooperation corresponds to quality competition, while horizontal cooperation relates to price competition. Furthermore, we predict that a higher number of competitors reduces the incentives for horizontal cooperation as it diminishes the gains from “collusion”. We test these hypotheses using Swiss firm-level panel data that allows us to control for simultaneity of cooperation decisions and endogeneity of competition. Our empirical analysis supports the relevance of distinguishing between competition dimensions and cooperation partners, respectively. We find that price competition has an influence on university cooperation in the form of an inverted U. Quality competition only has an influence on university cooperation and the relationship shows a U-form. Moreover, we see that the number of principal competitors reduces cooperation between competitors.     

Measuring the economic impact of research joint ventures supported by the EU Framework Programme

The objective of this paper is to analyse the effects of international R&D cooperation on firms?? economic performance. Our approach, based on a complete data set with information about Spanish participants in research joint ventures supported by the EU Framework Programme during the period 1995?C2005, establishes a recursive model structure to capture the relationship between R&D cooperation, knowledge generation and economic results, which are measured by labour productivity. In the analysis we take into account that the participation in this specific type of cooperative projects implies a selection process that includes both the self-selection by participants to join the consortia and the selection of projects by the European Commission to award the public aid. Empirical analysis has confirmed that: (1) R&D cooperation has a positive impact on the technological capacity of firms, captured through intangible fixed assets and (2) the technological capacity of firms is positively related to their productivity.     

Do R&D strategies in high-tech sectors differ from those in low-tech sectors? An alternative approach to testing the pooling assumption

Most studies investigating the determinants of R&D investment consider pooled estimates. However, if the parameters are heterogeneous, pooled coefficients may not provide reliable estimates of individual industry effects. Hence pooled parameters may conceal valuable information that may help target government tools more efficiently across heterogeneous industries. There is little evidence to date on the decomposition of the determinants of R&D investment by industry. Moreover, the existing work does not distinguish between those R&D determinants for which pooling may be valid and those for which it is not. In this paper, we test the pooling assumption for a panel of manufacturing industries and find that pooling is valid only for output fluctuations, adjustment costs and interest rates. Implementing the test results into our model, we find government funding is significant only for low-tech R&D. Foreign R&D and skilled labour matter only in high-tech sectors. These results suggest important implications for R&D policy.     

Measurement of R&;D Multipliers: The Case of Greece

The present paper applies empirically the methodology of backward and forward R & D multipliers for the case of Greece, which, despite its high growth rates in output (G.D.P.), ranks last among European Union (E.U) countries in R&D expenditure. The backward R&D multipliers measure the total amount of R&D expenditure embodied in one unit of an industrys final demand. On the other hand, forward multipliers reflect the percentage of an industrys R&D expenditures that is embodied in the final output categories. The results show that the Greek economy experiences a decrease in backward R&D multipliers over the time period 1993–1997, and some policy implications are discussed, regarding the countrys priority to increase R&D diffusion and stimulate R&D financing.     

University and inter-firm R&D collaborations: propensity and intensity of cooperation in Europe

This paper investigates the determinants of firms’ decision to cooperate in R&D with universities and the intensity of the cooperation effort, in relation to the engagement in inter-firm R&D collaborations. Using novel survey data for seven EU countries between 2007 and 2009, our analysis accounts for unobservable factors influencing R&D cooperation forms and addresses the main endogeneity issues. We find that internal knowledge, appropriability conditions and incoming spillovers explain a large variation of the probability and of the intensity of R&D collaborations of European firms with universities (and comparably with unaffiliated companies).     

Unemployment,business cycles,crime, and the Canadian provinces

Purpose

Test the Cantor and Land (1985) model using multiple measures of the state of the economy.

Methods

A panel data set of the 10 Canadian provinces, 1981 – 2009, is analyzed using a hybrid modeling approach called a decomposition model. Rather than one economy-related model, four are included in the analysis: gross provincial product, gross provincial product per capita, unemployment rate, and low income.

Results

All economy-related variables matter for property and violent crime, but the sign and magnitude of the estimated parameters vary based on context.

Conclusions

The relationship between the economy and crime is complex. Only including one economy-related variable appears to result in omitted variable bias. As such, any evaluation of the relationship between the economy and crime must consider multiple measures of the economy.     

THE EFFECTS OF LOCAL LAW ENFORCEMENT BLOCK GRANTS ON SERIOUS CRIME*

Research Summary The Local Law Enforcement Block Grants (LLEBG) Program was second only to the Community‐Oriented Policing Services (COPS) Program in its funding levels. Some $3 billion was dispensed to local jurisdictions to reduce crime and improve public safety; yet the effects of LLEBG funding on crime have been all but ignored. Accordingly, panel data from more than 5,000 cities covering a 12‐year period (1990–2001) were collected, and index crime rates were regressed on LLEBG funding and appropriate demographic controls. Additional controls for police levels and other federal grants were also introduced, proper checks for endogeneity of grants (and police levels) were performed, and the models were subjected to an array of robustness checks. A consistent message emerged: LLEBG Program funding was associated with significant reductions in serious crime. Policy Implications Although LLEBG funding seemed to reduce serious crime, the results also revealed that the decrease did not occur through the hiring of additional police officers, even though many funds were used for that purpose. Other mechanisms were thus at work, but the data did not provide insights into what these mechanisms were. In any case, every $1 in LLEBG funding per capita was associated with approximately 59 fewer index crimes per 100,000 people. When combined with the findings from recent studies of the effects of community policing grants on crime, this study suggests additional federal support for local law‐enforcement agencies should be considered.     

Liberal versus conservative public policies on crime: What was the comparative track record during the 1990s?

The purpose of this study was to examine the efficacy of social control and social support policies associated with conservative and liberal political ideologies with respect to violent crime in large U.S. cities during the 1990s. Eighty-five cities with populations of 150,000+ were included in the analysis; these cities accounted for fifty-two million urban area residents of the U.S. The use of the two-way, fixed-effect panel data method of statistical analysis enabled the authors to assess the relationship between change in local government expenditures for police and court services (social control) and expenditures on community development and park/recreation (support policy) and corresponding changes in crime rates documented within these cities. The findings indicated that expenditure on both police services and community development initiatives had significantly suppressive effects on crime in these cities during the period of the 1990s. It appeared that both conservative and liberal policies had their merits as effective countermeasures to crime.     

Expanding forensic science through forensic intelligence

Research and Development (‘R&D’) in forensic science currently focuses on innovative technologies improving the efficiency of existing forensic processes, from the detection of marks and traces at the scene, to their presentation in Court. R&D approached from this perspective provides no response to doubts raised by recent criminological studies, which question the effective contribution of forensic science to crime reduction, and to policing in general.Traces (i.e. forensic case data), as remnants of criminal activity are collected and used in various forms of crime monitoring and investigation. The aforementioned doubts therefore need to be addressed by expressing how information is conveyed by traces in these processes. Modelling from this standpoint expands the scope of forensic science and provides new R&D opportunities. Twelve propositions for R&D are stated in order to pave the way.     

The relation between technology import and domestic R&D

The relation between domestic R&D and imports of technology is examined for 10 countries. Simple regressions revealed strong complementarity for each of the countries. Multiple regressions including GNP per capita and number of scientists and engineers were performed for the five countries with time series for all the variables. Strong complementarity was found between technology imports and domestic R&D and other variables for Japan and South Korea, weak for France, none for Germany and the US. Excluding government-financed R&D in the US resulted in a substitutive relation. Japan revealed a sharp decline in the ratio of technology payments to R&D spending; Korea is following in its steps. Complementarity appears to weaken in later stages as technology development strategies shift from dependent to imitative to autonomous or offensive technology development.     

THE RELATIONSHIP OF POLICE AND CRIME

This study develops a model to measure the impact of police expenditure on crime rates across cities. It specifically allows for the two-way relationship between police and crime. Other things being equal, cities with more police per capita should have lower crime rates, if police reduce crime. Simultaneously, the higher the crime rate, the greater the public demand for police. In its final formations, the model contains two identifiable equations with two endogenous variables, police expenditure per capita and the crime rate. Following a discussion of the reliability of crime statistics, the model is estimated by two-stage least squares, using FBI crime data for 119 cities in 1960. These two-stage results are compared with ordinary least-square estimation results and are found to be clearly superior.     

Establishing the statistical relationship between population size and UCR crime rate: Its impact and implications

The fact that the volume of crime is related to the size of a jurisdiction's population has been well established. The relationship between crime rate and population size, however, is less clear. Crime rate presents crime on a per capita basis, and is intended to adjust for population size so that comparisons can be made. In this article, the author first establishes the statistical relationship between crime rate and population size. Once established, he conducted an analysis of crime rates in jurisdictions of various sizes and in a variety of population-based strata using data obtained from the Uniform Crime Reports (UCR). Based on his findings, the author discusses implications for research and analysis, database management, and making jurisdictional comparisons of crime rates.     

Technology dissemination programmes and extramural R&;D support in India

This article offers a brief overview of the programmes in place for the provision of financial support to entrepreneurs and R&D organizations for technology commercialization and dissemination in India. Financial assistance is provided under these programmes to the industrial enterprises and R&D organizations by the Government of India for undertaking the development of new technology based products. Technology financing under these programmes is provided in the form of: grants, loan, and/or equity with the aim to strengthen the linkages of R&D laboratories with industry, as well as for the production of technology based products for the domestic and global market. Extramural funding agencies of the central government departments such as DSIR & DBT are involved in mainly the provision of financial support for R&D.     

The effect of competitive and non-competitive R&;D collaboration on firm innovation

A firm can improve its innovation either by its internal research and development (R&D) efforts or by forming external collaborative R&D alliances. While previous studies on R&D collaboration and knowledge diffusion mainly focus on various external sources of R&D collaboration, little effort has been made to investigate the joint impact of competitive and non-competitive R&D collaborations on firm innovation simultaneously. By examining the data of 165 Taiwanese firms in the information and communication technology industry, we find that: (1) non-competitive R&D collaborations with universities have a positive direct impact on firm’s innovation performance; and (2) both non-competitive and competitive R&D collaborations have a positively moderating effect on the relationship between a firm’s internal R&D efforts and firm innovation and the positive moderating effect is higher for non-competitive R&D collaborations than that of competitive R&D collaborations. These findings suggest that R&D collaborations, either non-competitive or competitive, exhibit the nature of a win–win situation. We also derive implications for firms’ selection of R&D alliance partners and government policies.     

The management of industry–university joint research projects: how do partners coordinate and control R&D activities?

Benefits derived from industry–university joint research projects (e.g., competitive advantages for firms, opportunities for field experimentation, the funding of academics’ activities and knowledge and technology transfer among partners) are strongly affected by the management system exploited to combine partners’ resources and tasks. Nevertheless, scholars have not paid great attention to management practices of collaborative research, leaving the best practices undefined. Aiming to fill this literature gap, this paper is a first attempt to open the black box of the management of the implementation stage of research and development (R&D) cooperation. The investigation, based on case studies, focuses on how participants of R&D cooperation coordinate and control their activities and what drives the selection of integrating mechanisms. The comparison of coordination and control systems implemented in six industry–university joint research projects highlights that planning and mutual adjustment practices are combined in different ways to manage R&D cooperation. Project and relationship characteristics affect the configuration of the management system. Task uncertainty leads to the decentralization of coordination and control practices, equivocality provides incentives for group coordination mode and reduces the need of informal ongoing monitoring and reciprocal interdependence among partners requires the exploitation of up-to-date project plans.     

A bit of basic,a bit of applied? R&D strategies and firm performance

The Journal of Technology Transfer - Most studies analysing the relationship between R&D and firm growth focus on total R&D investment. This paper aims to analyse separately each...