Firm-level contributions to the R&D intensity distribution: evidence and policy implications

This paper decomposes the Spanish aggregate R&D distribution to disentangle the contributions of R&D public financing, gazelle firms, and financial constraints. Applying the Chernozhukov, Fernandez-Val and Melly (2013) distribution regression approach, we estimate the contributions of these components at each point of the distribution. The analysis is carried out for two periods, pre-crisis 2004-2008 and post-crisis 2009-2014. We thereby introduce a comparative perspective that allows us to consider possible business cycle effects. Our findings show that the main explanatory factors of the significant post-crisis drop in Spanish aggregate R&D are changes in the public financing scheme and the decreased contribution of gazelles. Our results provide a rigorous analysis of Spanish R&D, hint at a possible transmission channel for reduced business dynamism, and offer interesting insights for policymaking.