Economic impacts of public subsidies on young innovating SME’s performances: the case of the French National Competition for creation of New Technology-based Firms
AbstractFaced with the technological changes and with the rise of international competition, the competitiveness of firms is based more and more on innovation. In this context, the new innovating firms are regarded as source of competitive dynamism. However, these firms encounter difficulties to finance their activities; it is thus widely acknowledged that there is a need for public support towards these innovating SMEs. In this context, the French government launched in 1999 a National Competition for creation of New Technology-based Firms, which rewards some innovating projects in giving them a financial and managerial support to start and develop their activity. Ten years after the creation of the competition, we propose to evaluate its economic effects: How did the Competition winners grow and survive? We thus analyse the characteristics of the firms that have won the competition and focus our study on the factors of survival of these firms. To undertake our analysis, we use a database from the French ministry of research, composed of the prize-winning firms. This database is merged with the DIANE database, which gives financial information on firms. Our analysis is then based on three categories of indicators to characterise the survival rate and the factors of survival of new firms. We distinguish indicators related to the firms itself, the entrepreneur, and the environment of the firm. Our results show that the firms that won the contest have a higher survival rate than other firms. We also show that the indicators to explain the survival rate are similar to the one found in the literature.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/4999.
Date of creation: Sep 2009
Date of revision:
new technology-based firms; public policy; competitiveness; France; survival rate; Innovation;
Find related papers by JEL classification:
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
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