Multilevel Public Funding for Small Business Innovation: A Review of US State SBIR Match Programs

Lanahan, L. (2015) Multilevel public funding for small business innovation: a review of US state SBIR match programs. Journal of Technology Transfer, DOI 10.1007/s10961-015-9407-x.

Posted: 4 May 2015

See all articles by Lauren Lanahan

Lauren Lanahan

University of Oregon - Charles H. Lundquist School of Business

Date Written: April 23, 2015

Abstract

US State governments invest in early-stage innovative activity as an economic development strategy. Nevertheless, attention directed at the public sector’s role in this capacity has been placed on federal policy actions overlooking the growing role of states. The primary aims of this paper are two-fold: (1) to articulate the motivations for multilevel public support for small business innovative activity, placing emphasis on state level incentives directed towards entrepreneurial activity; and (2) to empirically evaluate the State Match Phase I (SMP-I) program. The SMP-I program is a diffuse state level policy designed to complement the federal Small Business Innovation Research (SBIR) program by offering noncompetitive matching funds to the state’s successful SBIR Phase I recipients. This offers an opportunity to examine the marginal impact of public R&D given the state intervention. This paper employs a state and year fixed effects model and considers two outcome variables — SBIR Phase II success rates and SBIR Phase I application activity. To account for industrial heterogeneity, the data are stratified by the federal mission agencies. Results from the empirical analysis indicate that the state match increases the Phase II success rates for firms participating in the National Science Foundation SBIR program.

Keywords: SBIR, Innovation Policy, State government, Small Business, Program evaluation

JEL Classification: O32, O38

Suggested Citation

Lanahan, Lauren, Multilevel Public Funding for Small Business Innovation: A Review of US State SBIR Match Programs (April 23, 2015). Lanahan, L. (2015) Multilevel public funding for small business innovation: a review of US state SBIR match programs. Journal of Technology Transfer, DOI 10.1007/s10961-015-9407-x., Available at SSRN: https://ssrn.com/abstract=2598219

Lauren Lanahan (Contact Author)

University of Oregon - Charles H. Lundquist School of Business ( email )

1208 University of Oregon
Eugene, OR 97403-1208
United States

HOME PAGE: http://www.laurenlanahan.com

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