The Impact of University Enterprise Incentive Program on the Performance and Technological Efforts of Brazilian Industrial Firms

Dec 2006
This study is an unprecedented effort in Brazil to evaluate the effectiveness of public incentive programs to develop technological capacity of firms. There are currently no empirical evaluations that have explored the impacts of this type of program on the performance of the Brazilian industrial firms in greater depth, particularly for those beneficiaries of these programs. This study therefore evaluates the FNDCT's impact, particularly its cooperative modality, which comprises a joint university-enterprise project for technological innovation. The results indicate that the FNDCT has positive impacts on private R&D expenditures of beneficiary firms. This rejects the hypothesis of crowding out and strengthens the hypothesis of the existence of crowding in between public and private funds. The results on the economic performance of beneficiary firms are, however, inconclusive.