Do Public R&D Expenditures Foster Business R&D Investments?

Purpose – The aim of the paper was to assess the relationship between public R&D expenditures and business R&D investments in EU regions.Design/Methodology/Approach – The data for the analysis were retrieved from the Regional Innovation Scoreboard (RIS) 2016. The generalized structural equation model – GSEM was adopted to verify the formulated hypothesis. The research sample covered 214 regions of 22 EU Member States and Norway. Findings – The results of research indicate that public R&D are additional to business R&D investments in EU regions. Moreover, innovative productivity is positively related to public financial support for R&D.Originality/Value – So far, most of the available empirical literature has focused on the relationship between public financial support policies for R&D activities and business R&D expenditures either at the macro or micro level. The present paper attempts to fill this gap by providing an insight into this matter at the regional level. Article type – Research paper.