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The effects of R&D subsidies and network embeddedness on R&D output: evidence from the German biotech industry

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  • Tobias Buchmann
  • Micha Kaiser

Abstract

Although policy makers subsidize firms’ R&D projects to increase innovational output in an industry, region, or country, it remains unclear whether such subsidization triggers additional R&D efforts or crowds out private investments. To address this question, we assess the effectiveness of subsidization for individual and collaborative research in the German biotech industry while also examining the relevance of network embeddedness for patent output. Our results indicate that subsidies do lead to increased patent output, with additional benefits from involvement in more than one project. However, the amount of money is only significant under certain circumstances. Also, it is higher degree centrality in the firm network that significantly increases R&D success.

Suggested Citation

  • Tobias Buchmann & Micha Kaiser, 2019. "The effects of R&D subsidies and network embeddedness on R&D output: evidence from the German biotech industry," Industry and Innovation, Taylor & Francis Journals, vol. 26(3), pages 269-294, March.
    • Handle: RePEc:taf:indinn:v:26:y:2019:i:3:p:269-294
    DOI: 10.1080/13662716.2018.1438247
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    Cited by:

    1. Buccella, Domenico & Fanti, Luciano & Gori, Luca, 2023. "The disclosure decision game: Subsidies and incentives for R&D activity," Mathematical Social Sciences, Elsevier, vol. 125(C), pages 11-26.
    2. Kiman Kim & Sang Ok Choi & Sooyeon Lee, 2021. "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. 12(2), pages 645-675, June.
    3. Pu‐Yan Nie & Xu Xiao & Chan Wang & Ting Cui, 2020. "Innovation subsidy under duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 362-370, April.
    4. Lea F. Stöber & Marius Boesino & Andreas Pyka & Franziska Schuenemann, 2023. "Bioeconomy Innovation Networks in Urban Regions: The Case of Stuttgart," Land, MDPI, vol. 12(4), pages 1-22, April.
    5. Chapman, Gary & Hottenrott, Hanna, 2023. "Founder personality and start-up subsidies," ZEW Discussion Papers 23-008, ZEW - Leibniz Centre for European Economic Research.
    6. Kwangsoo Shin & Minkyung Choy & Chul Lee & Gunno Park, 2019. "Government R&D Subsidy and Additionality of Biotechnology Firms: The Case of the South Korean Biotechnology Industry," Sustainability, MDPI, vol. 11(6), pages 1-22, March.
    7. Bo Yao & Fangbin Qiao, 2023. "The Heterogeneous Effects of Central and Local Subsidies on Firms’ Innovation," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    8. Thomas H. W. Ziesemer, 2021. "The Effects of R&D Subsidies and Publicly Performed R&D on Business R&D: A Survey," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 171-205, March.
    9. Manzhi Liu & Liyuan Liu & Shichun Xu & Mingwei Du & Xianxian Liu & Yanqin Zhang, 2019. "The Influences of Government Subsidies on Performance of New Energy Firms: A Firm Heterogeneity Perspective," Sustainability, MDPI, vol. 11(17), pages 1-20, August.
    10. Sandro Mendonca & Hugo Confraria & Manuel Mira Godinho, 2021. "Appropriating the returns of patent statistics: Take-up and development in the wake of Zvi Griliches," SPRU Working Paper Series 2021-07, SPRU - Science Policy Research Unit, University of Sussex Business School.
    11. Harry Jeong & Kwangsoo Shin, 2020. "Exploring Factors Affecting Sustainable Innovation Performance of Food Firms. A Case of Korean Food Industry," Sustainability, MDPI, vol. 12(23), pages 1-16, December.
    12. Yidan Liang, 2023. "The effect of capital and labour distortion on innovation," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 1709-1737, June.

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