Benefit thy neighbour or beggar thy neighbour? Spatial spillover effects of multiple innovation policies

The efficacy of innovation policies for local areas has been widely discussed. However, how different innovation policies will relocate R&D resources across regions has not been thoroughly discussed, particularly in emerging economies. This paper adds to the literature by considering the potential spatial spillover effects of multiple innovation policies. Results show that neighbouring regions suffer a loss in R&D resources resulting from more generous local innovation policies. The beggar-thy-neighbour effects of innovation policies are responsible for the ineffectiveness or crowding-out effects at the aggregate level. In addition, the negative spillovers of the innovation policies will decay with geographical distances and have different boundaries. These findings have manifold implications for avoiding redundancy in innovation resources and the 'zero-sum' policy effect at the macro level.