Effect of private and public investment in R&D on innovation in Mexico’s biotechnology firms

Purpose In light of the controversy between the theoretical importance of financing biotechnology firms’ research and development (R&D), and the firms’ contradictory and ambivalent empirical results, this paper aims to contribute to the debate by providing empirical evidence from Mexico’s case. Design/methodology/approach The authors use the probit model to determine if firms’ achievements in innovations are related to both private and public financing, and if so, to calculate their marginal effect on the firms’ innovation (n = 40 from 53 firms: 75.5% response). The survey was applied in 2015. Findings Although a large proportion of the firms innovate and dedicate resources to R&D activities, neither private financing (different from the R&D portion of sales) nor public financing has an impact on innovation activity. Research limitations/implications It is necessary to increase the number of studies that corroborate the type of link established between innovations in biotechnology firms and financing. Analyzing the financing/innovation links at various stages of the innovation process would also be relevant. Originality/value The research results support the perspective that the theoretical relationship between the financing and achievements of innovation is not conclusive and point to relevant considerations for the public policy agenda of the case study.

Public Financing of Human Development in India: A Review

Role of public financing of human development (HD) is inevitable, especially for developing countries like India where access to resources and economic opportunities are not equitably distributed among people. Governments aim to achieve equity in distribution of resources through allocative and redistributive policies whereas macroeconomic stabilisation policies aim to achieve higher economic growth and stability in the price level. Expenditure policies of the governments envisage in delivering larger public goods and services to enable people to take part in economic activities by investing in human capital and infrastructure developments. Progressivity of the tax system helps in achieving equity by redistribution of resources among people. Being merit goods, expenditures on education, health, and poverty eradication make it a case for public investment which empowers people to improve human capital. The benefit of universal economic participation is expected to contribute in larger mobilisation of public resources over time. Lack of economic opportunities and earning a respectable income may increase dependence on public transfers which may reduce fiscal space of the governments to finance programmes to promote overall economic growth. The objective of this article is to review existing studies on public financing of HD in India and highlight emerging challenges.

The End of Cornucopia: Party Financing after the Great Recession

This article investigates the dimension and evolution of the financing of political parties. It focuses on 28 parties in the five major European countries (Germany, France, UK, Italy, Spain), analysing the parties’ budgets from 2002 to 2016. The article's assessment shows that the availability of funds increased until the beginning of the Great Recession (2008), and then decreased, mainly due to a decline in public support for parties. Diminished state generosity has led parties to look for different sources of financing: the article shows the proportion of self-funding resources in terms of membership fees and private donations that has sustained the parties’ finances. Finally the article presents a model that helps to explain the shrinking of parties’ income by including parties’ ideological alignment, electoral outcome, presence in government and share of public financing, and countries’ public spending and GDP level, to investigate the plausible causes of the reduction of parties’ income.

The relationship between development assistance for health and public health financing in 134 countries between 2000 and 2015

This paper utilizes causal time-series and panel techniques to examine the relationship between development assistance for health (DAH) and domestic health spending, both public and private, in 134 countries between 2000 and 2015. Data on 237 656 donor transactions from the Institute for Health Metrics and Evaluation’s DAH and Health Expenditure datasets are merged with economic, demographic and health data from the World Bank Databank and World Health Organization’s Global Health Observatory. Arellano–Bond system GMM estimation is used to assess the effect of changes in DAH on domestic health spending and health outcomes. Analyses are conducted for the entire health sector and separately for HIV, TB and malaria financing. Results show that DAH had no significant impact on overall domestic public health investment. For HIV-specific investments, a $1 increase in on-budget DAH was associated with a $0.12 increase in government spending for HIV. For the private sector, $1 in DAH is associated with a $0.60 and $0.03 increase in prepaid private spending overall and for malaria, with no significant impact on HIV spending. Results demonstrate that a 1% increase in public financing reduced under-5 mortality by 0.025%, while a 1% increase in DAH had no significant effect on reducing under-5 mortality. The relationships between DAH and public health financing suggest that malaria and HIV-specific crowding-in effects are offset by crowding-out effects in other unobserved health sectors. The results also suggest policies that crowd-in public financing will likely have larger impacts on health outcomes than DAH investments that do not crowd-in public spending.