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This paper discusses conceptual frameworks for measuring the effects of innovation policy and begins with applying conventional descriptive methods to explore how firms rate and rank the merits of public intervention. Based on survey data from some 1200 Austrian firms we then challenge the hypothetical survey question ("What would you have done if public support was denied?") by comparing the respective answers with changes that actually occurred when public assistance was refused. This is a contribution to the ongoing literature as is the attempt to relate any of the observed additionalities to the firms' characteristics, their perceived barriers to innovation and the degree they make use of the public support system. The effects of policy interventions prove to be cumulative in a dual sense. On the one hand, our results confirm the well-known notion that large firms make the best use of funds. On the other hand, substantial changes in the way a company undertakes R&D&I-related activities appear to only result from multiple policy interventions of different kinds. While supported firms tend to immediately increase their resources devoted to innovation projects, the result-based concepts of additionality only come into effect once a threshold level of intervention has been reached. Acknowledging that a public innovation support system already incentivises potential beneficiaries to change their innovation-related behaviour, and that eventual success in terms of outcomes does not arise from some discrete support measure, but from the synergies of multiple policy action, we conclude that future work should focus more on the evaluation of portfolios of programmes and their interactions.

In India, the term 'sick units' refers to economically unviable firms which are kept alive 'in the public interest' by means of subsidies of various kinds. Since this practice is common, and large parts of the industrial sector are affected, this phenomenon is referred to as industrial sickness. As of March 2001, the Reserve Bank of India counted over a quarter of a million of sick units with outstanding credit worth more than a quarter of a trillion of Indian Rupees, i.e. about 1.2 percent of Indian GDP. Recognizing that scarce resources are wasted on a great scale, the Government of India enacted special legislation to tackle the problem, namely, the Sick Industrial Companies Act. Based on a rich panel data set of some 4,400 manufacturing companies covering the 1988-1999 period, this thesis investigates the causes of sickness and the responses of firms to the policies that are supposed to remedy it. Chapter 1 motivates the topic, briefly summarizes existing contributions and introduces the dataset. Chapter 2 deals with Indian industrial policy, much of which is still a legacy of the attempt at planning a so-called mixed economy, with the state supposedly 'occupying the commanding heights'. Until the deregulation process of the early 1990s dismantled discrete barriers to entry, the economic environment involved a labyrinthine system of industrial licensing, the promotion of priority sectors, the regulation of foreign trade, capital flows and investment, protection of jobs in the regulated sector, and directed credit provided by public financial institutions. Chapter 3 first discusses various concepts of sickness. In the following several descriptive statistics from the given firm-level dataset are presented to provide a picture of the dimensions of sickness and its patterns over industries, time, location (state), form of ownership, firm-size and firm-age. The 'stylized facts' section is rounded out with an investigation of the relation between a firm's health status and measures of its profitability, single-factor productivity and liabilities, with firms classified by ten manufacturing sectors. Decreasing sickness rates in the early days of reforms stand vis-à-vis erratic rises in industrial sickness from the mid 1990s onwards. This finding raises two questions: (i) have the reforms ultimately failed to foster productive efficiency? or (ii) is increased sickness in the mid and late 90s just a reflection of the New Economic Policy (NEP) and its attempt to harden budgets? Chapter 4 draws on the former by analyzing productivity and efficiency in 10 separate Indian manufacturing industries over 3 important sub-periods, viz. pre-reform (1989-'91), transition phase (1992-'96), and post-reform (1997-'99). The results corroborate previous results on the general downturn of aggregate manufacturing performance after 1991. Moreover it is shown that sectoral downturns in productivity and mean efficiency went with greater variation in firm performance. Diverging firm-wise efficiency scores combined with increasing failure rates lead to the supposition that NEP reforms have not been generally unsuccessful, but that economically viable firms have considerably benefited from the changes in policy. The key hypothesis of chapter 5 is that prior to the 1991 reforms preferential treatment irrespective of economic viability established systematic disincentives to perform well, and once these were withdrawn, then firms fell into sickness. This hypothesis is tested by running a panel probit model, wherein observed health status in the late nineties is regressed against (i) dummy variables that capture the effect of the policy shock on formerly protected types of firms, (ii) pre-reform measures of budget softness, and (iii) pre-reform measures of economic distress. In a second part, it is investigated whether measures that lowered barriers to entry, and so sharpened competition, affected the dispersion of efficiency levels among firms and the incidence of sickness. While chapter 5 concentrates on reductions in barriers to entry, chapter 6 is more concerned with the remaining barriers to exit (of labor and firms). The starting point is the notion that the status of sickness entails great advantages to the incumbent management and the shareholders (exemptions from debt repayment or other obligations and generous financial assistance) as well as to politicians: once a company has fallen sick, the old management is replaced by a government appointed director. An agency model is tested, the core of which states that the politician-manager rescues the firm, because employment guarantees increase his popularity and his chances of getting re-elected. Inference from single-equation estimation mostly supports the model, but a simultaneous systems approach (a particular choice of the capital structure and the sickness status) would reject it.

In India, the term 'sick units' refers to economically unviable firms which are kept alive 'in the public interest' by means of subsidies of various kinds. Since this practice is common, and large parts of the industrial sector are affected, this phenomenon is referred to as industrial sickness. As of March 2001, the Reserve Bank of India counted over a quarter of a million of sick units with outstanding credit worth more than a quarter of a trillion of Indian Rupees, i.e. about 1.2 percent of Indian GDP. Recognizing that scarce resources are wasted on a great scale, the Government of India enacted special legislation to tackle the problem, namely, the Sick Industrial Companies Act. Based on a rich panel data set of some 4,400 manufacturing companies covering the 1988-1999 period, this thesis investigates the causes of sickness and the responses of firms to the policies that are supposed to remedy it. Chapter 1 motivates the topic, briefly summarizes existing contributions and introduces the dataset. Chapter 2 deals with Indian industrial policy, much of which is still a legacy of the attempt at planning a so-called mixed economy, with the state supposedly 'occupying the commanding heights'. Until the deregulation process of the early 1990s dismantled discrete barriers to entry, the economic environment involved a labyrinthine system of industrial licensing, the promotion of priority sectors, the regulation of foreign trade, capital flows and investment, protection of jobs in the regulated sector, and directed credit provided by public financial institutions. Chapter 3 first discusses various concepts of sickness. In the following several descriptive statistics from the given firm-level dataset are presented to provide a picture of the dimensions of sickness and its patterns over industries, time, location (state), form of ownership, firm-size and firm-age. The 'stylized facts' section is rounded out with an investigation of the relation between a firm's health status and measures of its profitability, ...

This paper explores the effects of Austria's recent Special Funds initiative on the R&D expenditures of its private corporate sector. It is the first one to approach the due evaluation from a macro perspective. First, simple descriptive statistics show that the noticeable delays in actual disbursements and the replacement of regular RTI funds by these special funds reduce the latter's scope. Apparently, money can't work unless it is spent and "additional" funds at the expense of regular funds will trigger no additionalities. We then set up an econometric model to derive some inference on the relative importance of different public support channels on the business sector's R&D spending. Though the estimates suggest that direct government subsidies to R&D-performing firms unfold great leverage effects, the dynamics of output growth as well as an R&D-prone high-tech industry structure seem to be more important drivers of the business sector's R&D intensity. Likewise, feeding special funds into the higher education sector will raise the R&D-intensity of the business enterprise sector only if and to the degree that such funds contribute to Austria's overall economic prosperity or foster structural change towards more R&D-intensive manufacturing.

This paper investigates price discrimination of German exporters across different foreign markets. We examine the degree of pass-through of exchange rate fluctuations in the pricing of 70 export items. The model is estimated using panel data on export unit values. Parameter estimation relies on GMM first difference, fixed effects, LAD, OLS first difference, and the random coefficients model. The main results for 70 manufactured goods and 15 destination countries between 1990-1994 are : The degree of pricing to market differs among destinations and products. Highest pricing to market is observed for U.S., Japan, Italy and Spain. Pricing to market is more prevalent in exports of chemicals and fertilisers than in machinery products.

Literaturverz. Bl. 23

EU enlargement has increased the diversity of the European Union in a substantial way, in particular with respect to its capacities in the fields of science, technology and innovation (STI). The shares of both gross and business sector expenditures on R&D in GDP are increasingly diverging following EU enlargement, pointing at quite different levels of technological opportunities and absorptive capacity. Against this background, this paper tries to disentangle the rationales for STI policies at an EU level. Starting from the different policy rationales we assign different STI policy fields to levels of governance. Our discussion suggests that the European Union plays two quite distinct roles in EU STI policy. The first role is closely related to the assignment of policy competences and establishes the fields where the EU should act as policy maker and programme owner. But this alone is likely to be insufficient when it comes to managing and coordination of complex horizontal policy fields such as STI policy. Here the second role of the European Commission comes into its own. This second role is not related to policy making but to the "right" to fuel discussions to find coordinated solutions. This role is essentially political and relates to the job to stimulate activities in areas where the Commission has no mandate (due to missing clear rationales) to act alone.