Ebook: Public support for R&D, knowledge sourcing and firm innovation: Examining a mediated model with evidence from the manufacturing industries

The aim of this study is to examine how firms realize the benefits associated with public support
for R&D programs. To do so, this research proposes and tests the hypothesis that the level of
knowledge sourcing applied by a firm during the innovation process mediates the relationship
between granted R&D subsidies and a firm’s innovative performance. Using a panel of Spanish
manufacturing companies, the findings provide evidence to indicate that the degree of firms’
investments in intramural R&D and the levels of openness in their innovation serve as
mediating mechanisms between R&D subsidies and firm innovation, as measured by patent
application and new product introduction counts. The study advances the literature on
innovation management and technology-policy evaluation by showing how firms use their
knowledge-sourcing strategies to exploit opportunities provided by public intervention.
Keywords: Intramural R&D, open innovation, firm innovative performance, innovation policy,
mediation analysis.