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Evaluating Additionality of an Innovation Subsidy Program Targeted at SMEs: An Exploratory Study

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  • Sonja Radas

    () (The Institute of Economics, Zagreb, Croatia)

  • Ivan-Damir Anic

    () (The Institute of Economics, Zagreb, Croatia)

Abstract

This paper explores the effectiveness of a recently introduced innovation subsidy program targeted at SMEs in Croatia. Three aspects of program additionality were evaluated: input, output and behavioral aspects. Both qualitative and survey research was employed, and four case studies with selected recipient companies were conducted. This study is a response to the policy-makers’ need for early program assessment. It attempts to show that even with early evaluation and small population of recipients it is possible to gain insight into program effectiveness. The analysis suggests that the effects of programs targeted at innovative SMEs might need to be evaluated differently than general subsidies. This is especially evident in the evaluation of input additionality. The analysis indicates that SMEs which started with a higher R&D capability tend to increase R&D intensity while participating in the program. The program raised R&D and innovation capability of the participating SMEs, but commercialization of project results remains a concern.

Suggested Citation

  • Sonja Radas & Ivan-Damir Anic, 2013. "Evaluating Additionality of an Innovation Subsidy Program Targeted at SMEs: An Exploratory Study," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 15(1), pages 61-88, April.
    • Handle: RePEc:iez:survey:ces-v15_04-2013_radas-anic
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    References listed on IDEAS

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    1. Lööf, Hans & Heshmati, Almas, 2004. "The Impact of Public Funding on Private R&D investment: New Evidence from a Firm Level Innovation Study," Working Paper Series in Economics and Institutions of Innovation 6, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies, revised 01 Mar 2005.
    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. Czarnitzki, Dirk & Fier, Andreas, 2002. "Do Innovation Subsidies Crowd Out Private Investment? Evidence from the German Service Sector," ZEW Discussion Papers 02-04, ZEW - Leibniz Centre for European Economic Research.
    4. Almus, Matthias & Czarnitzki, Dirk, 2003. "The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 226-236, April.
    5. Aerts, Kris & Czarnitzki, Dirk, 2004. "Using Innovation Survey Data to Evaluate R&D Policy: The Case of Belgium," ZEW Discussion Papers 04-55, ZEW - Leibniz Centre for European Economic Research.
    6. Scott J. Wallsten, 2000. "The Effects of Government-Industry R&D Programs on Private R&D: The Case of the Small Business Innovation Research Program," RAND Journal of Economics, The RAND Corporation, vol. 31(1), pages 82-100, Spring.
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    Cited by:

    1. Kiman Kim & Sang Ok Choi & Sooyeon Lee, 0. "The Effect of a Financial Support on Firm Innovation Collaboration and Output: Does Policy Work on the Diverse Nature of Firm Innovation?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 0, pages 1-31.

    More about this item

    Keywords

    additionality; innovation; R&D subsidy; SMEs; developing country; commercialization;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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