Modelling in the Field of Financing Innovative Activities and Intellectual Rights of Business Entities: The Experience of Belgium

Abstract

Support for innovation has been a deeply trending topic since the Keynesian theories arose after the Great depression. Theories like the New Growth theory and the New Keynesian theories both firmly agitated for fiscal and financial support. However, even as businesses are also investing in firm research and development activities to generate competitive advantage and disseminate innovation created, most countries have not fared so well in this regard as increasing financing seems to be a burden for some countries. Belgium, for the past couple of years has consistently performed retrogressively in the creation of intellectual rights from innovation and is currently the worst performing EU member state in terms of intellectual rights despite the infrastructural and financial support provided by at the European and National level. Having piqued our interest, we therefore intend to assess the response of Belgium to funding support provided to support the application for intellectual rights and the dissemination of such innovation. Using Structural Equation Modelling and a panel data from the European Innovation Scoreboard (2011-2018), we found that public sector, business sector and venture capital funds in Belgium did not significantly influence the intellectual rights assigned to their innovated products. Cooperation of SMEs and public private sector was tested as a mediator to effectively translate funding sources but that was also found to be not significant to accruing intellectual rights. However, funding support for innovation was found to significantly support the export to medium and high-tech products and knowledge intensive exports as well as cooperation of regional entities. Finally, we devised policy recommendations for Belgium on these findings.