(International) R&D Collaboration and SMEs: The Effectiveness of Targeted Public R&D Support Schemes
KU Leuven - Faculty of Business and Economics Research Paper No. MSI_1301
50 Pages Posted: 29 Jan 2013
Date Written: November 12, 2012
This study analyses the effectiveness of targeted public support for R&D investment. In particular, we test whether the specific policy design aiming at incentivizing (international) collaboration and R&D in small and medium-sized firms achieves the desired objectives on input as well as output additionality. Our results show that the targeted R&D subsidies accelerate R&D spending in the private sector, and especially so in the targeted groups.
Further, we differentiate between privately financed R&D and subsidyinduced R&D investment to evaluate their respective effects on innovation performance. The results confirm that the induced R&D is productive as it translates into marketable product innovations. While both types of R&D investments trigger significant output effects, we find that the effect of subsidy-induced R&D investment is higher for firms that collaborate internationally as well as for SMEs.
Keywords: Innovation Policy, Subsidies, R&D, SMEs, International Collaboration, Treatment Effects, Innovation Performance
JEL Classification: C14, C30, H23, O31, O38
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