Opening the black box of recurrence in innovation policy

Abstract

This paper studies the role that the three theoretical sources of recurrence – the Matthew effect – play in the process of the first and recurrent granting of innovation public funds. Those sources are a firm’s “reputation”, “innovation capabilities” and “formulation capabilities”. The empirical analysis is based on the Argentinean Technological Fund (in Spanish, FONTAR) between 2007-2018. The results show that firms’ formulation skills increase the probability of funds initially being granted, and then additional formulation skills and innovation capabilities increase the probability of recurrence, while reputation does the opposite.