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Public R&D Subsidies and Employment Growth - Microeconomic Evidence from Finnish Firms

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  • Koski, Heli

Abstract

This study empirically explores whether the public financial support for entrepreneurial R&D affects employment growth at the firm level. The data from the Finnish companies suggests that the firms that have received public R&D funding have not generally witnessed any greater employment growth than other companies. However, we find that the public R&D support targeted to the certain types of R&D activities notably contribute to the creation of new jobs : employment in those firms that have received public funding for the R&D projects targeted to the new business areas has clearly grown relatively more than in other companies. The relationship between the firm’s total innovation and employment growth is not statistically significant.

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Bibliographic Info

Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1143.

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Length: 24 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:rif:dpaper:1143

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Keywords: Public R&D subsidies; technology policy; employment growth;

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  1. 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.
  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. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Hall, Bronwyn H. & Mairesse, Jacques & Lotti, Francesca, 2006. "Employment, Innovation, and Productivity: Evidence from Italian Microdata," MERIT Working Papers 043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 153-59, May.
  6. Tor Jakob Klette & Svein Erik Førre, 1995. "Innovation and Job Creation in a Small Open Economy Evidence from Norwegian Manufacturing Plants 1982-92," Discussion Papers 159, Research Department of Statistics Norway.
  7. Brouwer, E. & Kleinknecht, Alfred & Reijnen, J.O.N., 1993. "Employment growth and innovation at the firm level," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5662246, Tilburg University.
  8. Koski, Heli, 2008. "Public R&D Funding and Entrepreneurial Innovation," Discussion Papers 1142, The Research Institute of the Finnish Economy.
  9. Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
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