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Measuring the Effects of Public Support Schemes on Firms' Innovation Activities. Survey Evidence from Austria

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  • Rahel Falk

    (WIFO)

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    Abstract

    This paper discusses conceptual frameworks for measuring the effects of innovation policy and begins with applying conventional descriptive methods to explore how firms rate and rank the merits of public intervention. Based on survey data from some 1200 Austrian firms we then challenge the hypothetical survey question ("What would you have done if public support was denied?") by comparing the respective answers with changes that actually occurred when public assistance was refused. This is a contribution to the ongoing literature as is the attempt to relate any of the observed additionalities to the firms' characteristics, their perceived barriers to innovation and the degree they make use of the public support system. The effects of policy interventions prove to be cumulative in a dual sense. On the one hand, our results confirm the well-known notion that large firms make the best use of funds. On the other hand, substantial changes in the way a company undertakes R&D&I-related activities appear to only result from multiple policy interventions of different kinds. While supported firms tend to immediately increase their resources devoted to innovation projects, the result-based concepts of additionality only come into effect once a threshold level of intervention has been reached. Acknowledging that a public innovation support system already incentivises potential beneficiaries to change their innovation-related behaviour, and that eventual success in terms of outcomes does not arise from some discrete support measure, but from the synergies of multiple policy action, we conclude that future work should focus more on the evaluation of portfolios of programmes and their interactions.

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    File URL: http://www.wifo.ac.at/wwa/pubid/25914
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    Bibliographic Info

    Paper provided by WIFO in its series WIFO Working Papers with number 267.

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    Length: 25 pages
    Date of creation: 18 Jan 2006
    Date of revision:
    Handle: RePEc:wfo:wpaper:y:2006:i:267

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    Keywords: innovation policy; policy evaluation; methods;

    References

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    1. Paul A. David, Bronwyn H. Hall and Andrew A. Toole., 1999. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," Economics Working Papers E99-269, University of California at Berkeley.
    2. Klette, T.J. & Moen, J. & Griliches, Z., 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies," Papers 16/99, Norwegian School of Economics and Business Administration-.
    3. Stoneman, Paul & Vickers, John, 1988. "The Assessment: The Economics of Technology Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 4(4), pages i-xvi, Winter.
    4. Luukkonen, Terttu, 2000. "Additionality of EU framework programmes1," Research Policy, Elsevier, vol. 29(6), pages 711-724, June.
    5. Bruce Tether, 2003. "The sources and aims of innovation in services: Variety between and within sectors," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(6), pages 481-505.
    6. Georghiou, Luke & Roessner, David, 2000. "Evaluating technology programs: tools and methods," Research Policy, Elsevier, vol. 29(4-5), pages 657-678, April.
    7. José García-Quevedo, 2004. "Do Public Subsidies Complement Business R&D? A Meta-Analysis of the Econometric Evidence," Kyklos, Wiley Blackwell, vol. 57(1), pages 87-102, 02.
    8. Lee G. Branstetter & Mariko Sakakibara, 2002. "When Do Research Consortia Work Well and Why? Evidence from Japanese Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 143-159, March.
    9. Freeman, Chris, 1994. "The Economics of Technical Change," Cambridge Journal of Economics, Oxford University Press, vol. 18(5), pages 463-514, October.
    10. 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 - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
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