This paper draws on data obtained from a questionnaire survey conducted for the 242 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organisation), Japan's public management organisation promoting R&D, to explore how dependence on government support affects processes of private R&D projects and, in turn, the performance and commercialisation of developed technologies. Our analyses show that projects receiving more than a half of their entire R&D expenditures from NEDO tend to be isolated from in–house departments. Such isolation, derived mainly from the projects' unique positions in 'double dependence' structures, negatively affects project performance, especially those related to commercialisation, in two ways. First, high dependence on government resources prevents project members from interacting with people outside the project within the company. This inhibits project members from effectively leveraging internal resources - both technological and human - to overcome technological problems. Secondly, such high dependence weakens internal controls over project activities. This causes delayed development of marketable technologies and makes it difficult for projects to achieve justification for further investment required for commercialisation. Our findings suggest that for successful R&D leading to commercialisation, both companies and public funding agencies should encourage projects to maintain close relationships with other internal departments.
Keywords: government funding, R&, D performance, double dependence structures, commercialisation, private R&, D projects, research and development, government support, Japan, internal controls, investment justification, internal departments