Does public financial support stimulate innovation and productivity?

Meeting: Conferencia Internacional LALICS 2013 “Sistemas Nacionales de Innovación y Políticas de CTI para un Desarrollo Inclusivo y Sustentable”, 11 y 12 de noviembre 2013, Rio de Janeiro, BrasilMeeting: Conferência Internacional LALICS 2013 “Sistemas Nacionais de Inovação e Políticas de CTI para um Desenvolvimento Inclusivo e Sustentável”, 11 e 12 de novembro, 2013, Rio de Janeiro, BrasilThis paper contributes to literature evaluating the effects of public financial support on total innovation expenditure, innovation and productivity in a middle income country (Uruguay). It presents an impact evaluation of public financial support to innovation on innovation expenditure – extending analysis beyond the R&D context; and provides analysis of possible heterogeneity of impacts on services and manufacturing. Results indicate that there is no crowding-out effect of private innovation investment by public funds, and that public financial support in Uruguay seems to increase private innovation expenditure effort, particularly in manufacturing