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The EU Framework Programs: Are they worth doing?

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  • Dekker, Ronald
  • kleinknecht, A.H.

Abstract

Using CIS data from the Netherlands, Germany and France we test whether EU Framework programs do have effects on their participants' R&D input and innovative output. From our Heckman selection equations, we conclude that the FPs attract the "elite" of European innovators. The question is whether, after correction for self-selection, the programs have positive effects on innovative behaviour. This is hard to test meaningfully among large firms as EU funding is likely to cover only a minor share of their innovative activities. Analysing changes in R&D input we find that smaller firms increase their R&D input quite substantially after entering an EU FP program. Estimating equations that explain sales of innovative products, we find that firms that collaborate on R&D with clients, suppliers, competitors or public research institutes do not have increased sales of innovative products. We try to provide explanations for this counter-intuitive finding. Moreover, participation in an EU FP neither increases sales of innovative products. This result holds after numerous robustness checks. We argue that our insignificant outcomes do not necessarily imply that the FP programs are worthless. There is independent evidence that innovative projects funded by the EU FPs do, on average, involve more technical and scientific risks, they are more complex, and involve longer time horizons. Obviously, they are farer from market introduction which is not surprising, given the regulatory demand that EU FPs should be "pre-competitive". Against this background, we cannot exclude the possibility that an insignificant coefficient of FP participation in our equation on innovative output may still have a positive meaning.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8503.

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Date of creation: 22 May 2008
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Handle: RePEc:pra:mprapa:8503

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Keywords: innovation; R&D subsidies; collaborative R&D; CIS data; Netherlands; Germany; France;

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References

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  1. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
  2. Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
  3. Hall, Bronwyn & Van Reenen, John, 2000. "How effective are fiscal incentives for R&D? A review of the evidence," Research Policy, Elsevier, vol. 29(4-5), pages 449-469, April.
  4. Bronwyn H. Hall & John van Reenen, 1999. "How Effective are Fiscal Incentives for R&D? A New Review of the Evidence," NBER Working Papers 7098, National Bureau of Economic Research, Inc.
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Cited by:
  1. repec:hal:wpaper:hal-00622969 is not listed on IDEAS
  2. Luis Aguiar & Philippe Gagnepain, 2011. "European Cooperative R&D And Firm Performance," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00622969, HAL.
  3. Ascension Barajas & Elena Huergo & Lourdes Moreno, 2012. "Measuring the economic impact of research joint ventures supported by the EU Framework Programme," The Journal of Technology Transfer, Springer, vol. 37(6), pages 917-942, December.
  4. Barajas, A. & Huergo, E. & Moreno, L., 2012. "The Impact of International Research Joint Ventures on SMEs Performance," MPRA Paper 36306, University Library of Munich, Germany.

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