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European Cooperative R&D and Firm Performance: Evidence Based on Funding Differences in Key Actions

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  • Gagnepain, Philippe
  • Aguiar Wicht, Luis

Abstract

The Framework programmes created by the European Union are the main financial tools used to support cooperative R&D activities in the EU. Unlike previous empirical studies, this paper suggests that their impact on firms? competitiveness is significant. We analyze industry-oriented research joint ventures supported by the Fifth European Framework Programme between 1998 and 2002. A key feature of this Programme is that funding is available to the firms based on social and economic concerns instead of pure performance criteria, which guarantees that financial support is not granted conditional on technological opportunities. This allows us to identify the causal effect of the programme on firms? performance using the funding available to the firms in their respective industries as a source of exogenous variation in the decision to participate in the programme. Our results suggest that participation in large research projects raises labor productivity by at least 35 percent and profit margin by up to 8 percentage points.

Suggested Citation

  • Gagnepain, Philippe & Aguiar Wicht, Luis, 2013. "European Cooperative R&D and Firm Performance: Evidence Based on Funding Differences in Key Actions," CEPR Discussion Papers 9426, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9426
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    References listed on IDEAS

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    More about this item

    Keywords

    Firm performance; R&d cooperation; Treatment effect;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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