Implementing R&D policies: an analysis of Spain's pharmaceutical research program

Abstract

We analyze Spain's National Pharmaceutical Research Program using detailed firm-level data. We find differences between ex ante announced evaluation criteria and ex post implementation. This suggests that judging R&D programs on their design, rather than their implementation, may be misleading. We also uncover that the apparent discrimination against non-European firms can be interpreted as a premium to having local production facilities. Overall, the program values firms on the basis of criteria, such as R&D investment and patent spending, consistent with empirically tested measures of innovative activity.