Who benefits from innovation policy? The role of firms' capabilities in accessing public innovation funding

The objective of this paper is to study the role of firms' capabilities in their benefiting from public funds for innovation. The literature agrees that capabilities play a key role in policy access, but this relationship has not been specifically explored. The theoretical framework combines the evolutionary approach to firms' capabilities with the literature on innovation policy. The empirical strategy is based on the National Employment and Innovation Dynamics Survey, a CIS-type survey at the firm level. This includes data about access to the main Argentine Technological Fund (FONTAR). Results show that productive, innovation, and connectivity capabilities impact the probability of knowing about and accessing FONTAR, especially firms' productive and connectivity skills. Results also show that innovator firms have higher probabilities of knowing about and accessing FONTAR than non-innovator ones. This provides evidence about the need to think of the public funding of innovation articulated with other firm-level policies.