Policy Implications on Company Growth – A Review

This report is a synthesis of the previous literature analyzing the role of different types of companies on economic growth and employment, and an overlook on the impacts of different policy measures on companies. The role of large companies in the economy is still significant, although diminishing. However, the size of a company is nearly always determined at the company level, rather than at the group level, which brings some uncertainty to the interpretation of the results. Majority of the research on public corporate funding concerning Finland focuses on R&D subsidies; there are fewer studies covering other business subsidies and public venture capital investments. R&D subsidies have mostly positive impacts on employment, especially among young and small companies. Impacts on the productivity are, however, uncertain. Cooperation of public and private investors maximizes the impact of public venture capital investments. The other business subsidies may help firms to grow larger but do not improve their productivity.