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Private Investor Participation and Commercialization Rates for Government‐sponsored Research and Development: Would a Prediction Market Improve the Performance of the SBIR Programme?
Author(s) -
LINK ALBERT N.,
SCOTT JOHN T.
Publication year - 2009
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2008.00740.x
Subject(s) - commercialization , government (linguistics) , private sector , business , economics , industrial organization , finance , marketing , economic growth , linguistics , philosophy
An objective of the US Small Business Innovation Research (SBIR) programme is the private sector commercialization of funded R&D projects. However, our estimate of the actual or expected probability of commercialization of such R&D is fairly low; our analysis of Department of Defense (DoD) Phase II awards suggests that the estimated probability of commercialization is only 0.47. We investigate econometrically whether outside private investors have useful information about proposed SBIR projects' prospects for commercialization. Our findings suggest that they do, thereby providing support for the possibility that a prediction market could improve the performance of the SBIR programme.