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Do Targeted R&D Grants toward SMEs Increase Employment and Demand for High Human Capital Workers?

In: Questioning the Entrepreneurial State

Author

Listed:
  • Sven-Olov Daunfeldt

    (Institute of Retail Economics)

  • Daniel Halvarsson

    (The Ratio Institute)

  • Patrik Gustavsson Tingvall

    (Södertörn University)

  • Alexander McKelvie

    (Whitman School of Management, Syracuse University)

Abstract

Most previous studies on the employment effects of government R&D grants targeting SMEs are characterized by data-, measurement-, and selection problems, making it difficult to construct a relevant control group of firms that did not receive an R&D grant. We investigate the effects on employment and firm-level demand for high human capital workers of two Swedish programs targeted toward growth-oriented SMEs using Coarsened Exact Matching. Our most striking result is the absence of any statistically significant effects. We find no robust evidence that the targeted R&D grant programs had any positive and statistically significant effects on the number of employees recruited into these SMEs, or that the grants are associated with an increase in the demand for high human capital workers. The lack of statistically significant findings is troublesome considering that government support programs require a positive impact to cover the administrative costs associated with these programs.

Suggested Citation

  • Sven-Olov Daunfeldt & Daniel Halvarsson & Patrik Gustavsson Tingvall & Alexander McKelvie, 2022. "Do Targeted R&D Grants toward SMEs Increase Employment and Demand for High Human Capital Workers?," International Studies in Entrepreneurship, in: Karl Wennberg & Christian Sandström (ed.), Questioning the Entrepreneurial State, pages 175-198, Springer.
    • Handle: RePEc:spr:inschp:978-3-030-94273-1_10
    DOI: 10.1007/978-3-030-94273-1_10
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