Advanced Search
MyIDEAS: Login to save this paper or follow this series

Effectiveness and Efficiency of SME Innovation Policy

Contents:

Author Info

  • Foreman-Peck, James

    ()
    (Cardiff Business School)

Abstract

This paper assesses UK innovation policy impact on a large, population weighted, sample of both service and manufacturing SMEs. By focussing on self-reported innovation the study achieves a wider coverage of the effects of SME innovation policy than possible with more traditional indicators. Propensity score matching indicates that SMEs receiving UK state support for innovation were more likely to innovate than unsupported comparable enterprises. Innovating enterprises are shown to have grown significantly faster over the years 2002-4 when other growth influences are appropriately controlled. Combining these two results and comparing the outlays on SME innovation policy with the estimated effects suggests that policy was efficient as well as effective. There is evidence that SME tax credits were expensive compared with earlier support instruments. But the overall high returns estimated suggest that, even in times of public spending cuts, persisting with SME innovation policy would be prudent.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://patrickminford.net/wp/E2012_4.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2012/4.

as in new window
Length: 44 pages
Date of creation: Jan 2012
Date of revision:
Publication status: Forthcoming in Small Business Economics
Handle: RePEc:cdf:wpaper:2012/4

Contact details of provider:
Postal: Aberconway Building, Colum Drive, CARDIFF, CF10 3EU
Phone: +44 (0) 29 20874417
Fax: +44 (0) 29 20874419
Web page: http://business.cardiff.ac.uk/research/academic-sections/economics/working-papers
More information through EDIRC

Related research

Keywords: Innovation; State Aid; SME; Policy Evaluation;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 22(4), pages 483-498, Winter.
  2. Czarnitzki, Dirk & Hanel, Petr & Rosa, Julio Miguel, 2011. "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms," Research Policy, Elsevier, Elsevier, vol. 40(2), pages 217-229, March.
  3. Spielkamp, Alfred & Czarnitzki, Dirk & Rammer, Christian, 2008. "Innovation Success of Non-R&D-Performers: Substituting Technology by Management in SMEs," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 08-092, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Monjon, Stéphanie & Waelbroeck, Patrick, 2003. "Assessing spillovers from universities to firms: evidence from French firm-level data," Economics Papers from University Paris Dauphine, Paris Dauphine University 123456789/13785, Paris Dauphine University.
  5. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(1), pages 40-59, March.
  6. Bruno Crépon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation and Productivity : An Econometric Analysis at the Firm Level," Working Papers, Centre de Recherche en Economie et Statistique 98-33, Centre de Recherche en Economie et Statistique.
  7. Heckman, James J. & Navarro, Salvador, 2003. "Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models," IZA Discussion Papers 768, Institute for the Study of Labor (IZA).
  8. Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2009. "Defending Gibrat’s Law as a long-run regularity," Small Business Economics, Springer, Springer, vol. 32(1), pages 31-44, January.
  9. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, American Economic Association, vol. 78(4), pages 678-90, September.
  10. Hall, Bronwyn H., 2009. "The financing of innovative firms," EIB Papers 8/2009, European Investment Bank, Economics Department.
  11. Robert Wieser, 2005. "Research And Development Productivity And Spillovers: Empirical Evidence At The Firm Level," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 19(4), pages 587-621, 09.
  12. Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, Springer, vol. 33(1), pages 13-33, June.
  13. Colin Wren, 2002. "Evaluating the effect of soft business support upon small firm performance," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 334-365, April.
  14. Baghana, Rufin & Mohnen, Pierre, 2009. "Effectiveness of R&D Tax Incentives in Small and Large Enterprises in Quebec," MERIT Working Papers 001, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  15. repec:fth:harver:1473 is not listed on IDEAS
  16. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0151, National Bureau of Economic Research, Inc.
  17. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195060119, October.
  18. George Van Leeuwen & Luuk Klomp, 2006. "On the contribution of innovation to multi-factor productivity growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 367-390.
  19. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, National Bureau of Economic Research, Inc, in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
  20. Florence Jaumotte & Nigel Pain, 2005. "Innovation in the Business Sector," OECD Economics Department Working Papers 459, OECD Publishing.
  21. Monjon, Stephanie & Waelbroeck, Patrick, 2003. "Assessing spillovers from universities to firms: evidence from French firm-level data," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 21(9), pages 1255-1270, November.
  22. Gourieroux, Christian & Monfort, Alain & Renault, Eric & Trognon, Alain, 1987. "Generalised residuals," Journal of Econometrics, Elsevier, Elsevier, vol. 34(1-2), pages 5-32.
  23. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, American Economic Association, vol. 92(4), pages 1169-1184, September.
  24. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
  25. Roper, Stephen & Du, Jun & Love, James H., 2008. "Modelling the innovation value chain," Research Policy, Elsevier, Elsevier, vol. 37(6-7), pages 961-977, July.
  26. Tether, B. S. & Smith, I. J. & Thwaites, A. T., 1997. "Smaller enterprises and innovation in the UK: the SPRU innovations database revisited," Research Policy, Elsevier, Elsevier, vol. 26(1), pages 19-32, March.
  27. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  28. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications, Université Panthéon-Sorbonne (Paris 1) 98.15, Université Panthéon-Sorbonne (Paris 1).
  29. Pakes, Ariel & Ericson, Richard, 1998. "Empirical Implications of Alternative Models of Firm Dynamics," Journal of Economic Theory, Elsevier, Elsevier, vol. 79(1), pages 1-45, March.
  30. repec:fth:inseep:9833 is not listed on IDEAS
  31. Skuras, Dimitris & Tsegenidi, Kyriaki & Tsekouras, Kostas, 2008. "Product innovation and the decision to invest in fixed capital assets: Evidence from an SME survey in six European Union member states," Research Policy, Elsevier, Elsevier, vol. 37(10), pages 1778-1789, December.
  32. Inha Oh & Jeong-Dong Lee & Almas Heshmati & Gyoung-Gyu Choi, 2009. "Evaluation of credit guarantee policy using propensity score matching," Small Business Economics, Springer, Springer, vol. 33(3), pages 335-351, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Crafts, Nicholas & Hughes, Alan, 2014. "Industrial Policy for the Medium to Long-term," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 179, Competitive Advantage in the Global Economy (CAGE).
  2. Brink, Siegrun & Kriwoluzky, Silke & Bijedic, Teita & Ettl, Kerstin & Welter, Friederike, 2014. "Gender, Innovation und Unternehmensentwicklung," IfM-Materialien 228, Institut für Mittelstandsforschung (IfM) Bonn.
  3. Branka Ahlin & Mateja Drnovšek & Robert Hisrich, 2014. "Entrepreneurs’ creativity and firm innovation: the moderating role of entrepreneurial self-efficacy," Small Business Economics, Springer, Springer, vol. 43(1), pages 101-117, June.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cdf:wpaper:2012/4. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruce Webb).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.