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Public R&D Funding and Entrepreneurial Innovation

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  • Koski, Heli

Abstract

This study does not find any significant direct relationship between the public R&D funding and the firms` innovation output. The firms obtaining the public R&D support were not performing significantly better, on average, than others. However, we find evidence that the public R&D finance has substantially influenced the innovation output of the firms that have undertaken certain types of innovations activities. Particularly, public funding targeted to the firms focusing on new business areas in their R&D projects seems successful. Certain types of collaboration seem to also generate better entrepreneurial performance in terms of innovation. Those large firms that have more intensively collaborated with the SMS firm partners in their publicly funded R&D projects have filed more patent applications than other companies.

Suggested Citation

  • Koski, Heli, 2008. "Public R&D Funding and Entrepreneurial Innovation," Discussion Papers 1142, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:dpaper:1142
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    References listed on IDEAS

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    1. Holmstrom, Bengt, 1989. "Agency costs and innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 12(3), pages 305-327, December.
    2. Ebersberger, Bernd & Czarnitzki, Dirk & Fier, Andreas, 2004. "The Relationship between R&D Collaboration, Subsidies and Patenting Activity: Empirical Evidence from Finland and Germany," ZEW Discussion Papers 04-37, ZEW - Leibniz Centre for European Economic Research.
    3. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
    4. Saul Lach, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 369-390, December.
    5. Josh Lerner, 1997. "An Empirical Exploration of a Technology Race," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 228-247, Summer.
    6. 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.
    7. 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.
    8. Czarnitzki, Dirk & Kraft, Kornelius, 2004. "An empirical test of the asymmetric models on innovative activity: who invests more into R&D, the incumbent or the challenger?," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 153-173, June.
    9. Lach, Saul, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 369-390, December.
    10. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
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    Cited by:

    1. Koski, Heli, 2008. "Public R&D Subsidies and Employment Growth - Microeconomic Evidence from Finnish Firms," Discussion Papers 1143, The Research Institute of the Finnish Economy.

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    More about this item

    Keywords

    innovation; public R&D subsidies; technology policy;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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