(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

See all articles by Hanna Hottenrott

Hanna Hottenrott

Technische Universität München (TUM)

Cindy Lopes-Bento

K.U.Leuven; ZEW

Multiple version iconThere are 2 versions of this paper

Date Written: November 12, 2012

Abstract

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

Suggested Citation

Hottenrott, Hanna and Lopes-Bento, Cindy, (International) R&D Collaboration and SMEs: The Effectiveness of Targeted Public R&D Support Schemes (November 12, 2012). KU Leuven - Faculty of Business and Economics Research Paper No. MSI_1301. Available at SSRN: https://ssrn.com/abstract=2207911 or http://dx.doi.org/10.2139/ssrn.2207911

Hanna Hottenrott (Contact Author)

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

Cindy Lopes-Bento

K.U.Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

ZEW ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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