From Public Labs to Private Firms: Magnitude and Channels of Local R&D Spillovers

Abstract Introducing a new measure of scientific proximity between private firms and public research groups and exploiting a multi-billion euro financing program of academic clusters in France, we provide causal evidence of local spillovers from academic research to firms in the private sector. Our main estimate suggests that each euro spent in academic research through this program spurred an additional 0.81 euros in private R&D expenditures. We also show that this shock increased the average quality of patents. We exploit reports produced by funded clusters, complemented by data on firm creation, labor mobility and R&D public–private partnerships, to provide evidence on the channels for these spillovers. We discuss the policy implications of funding academic research to stimulate private R&D.