Publicly funded R&D networks, knowledge spillovers and innovation performance: Evidence from Norway

Many countries provide public policy support for R&D networks. In publicly funded R&D consortia, firms collaborate with each other and with public scientific institutions to carry out joint innovation projects. The idea behind these policy schemes is that collaborative innovation enables firms to benefit from knowledge spillovers within R&D networks. Surprisingly, however, there is no empirical research showing that spillover effects actually exist in publicly funded R&D consortia. This paper seeks to investigate the extent and sources of knowledge spillovers in R&D networks and to distinguish them from other drivers of additionality generated by collaborative innovation policy programs. Our empirical analysis focuses on Norway and encompasses the entire population of firms supported by R&D policy programs over the period 2002–2022, comprising approximately 15500 collaborative projects. Based on the information on each project, we construct networks of innovators and new R&D spillover pool variables. We use a spatial autoregressive econometric approach and estimate a network regression estimator that endogenizes peer effects related to knowledge spillovers. The econometric results show that the knowledge spillovers arising from publicly funded R&D networks are positive. We also find that the spillover effects resulting from Research Council programs are much stronger than those of tax incentives, and that the spillover effects are much stronger for collaborations between firms operating in different industries than for within-industry collaborations.