Analyzing the Interaction between R&D Subsidies and Firm’s Innovation Strategy

innovation and technology policies provide positive incentives to the firms to perform r&d activities. this article examines the decision of internal and external r&d expenditures of subsidized firms, estimating the impact of r&d subsidies on firms performing different innovation strategies. the spanish survey on business strategy for manufacturing firms (esee) is used for the period 1998-2005. results show that determinants of pure internal or external r&d expenditures obey to different motivations, affecting in consequence, the impact of the subsidies on firms adopting different sources of knowledge.