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R&D policies for young SMEs: input and output effects

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  • Dirk Czarnitzki
  • Julie Delanote

Abstract

This paper evaluates the current focus of EU policy makers on small and medium-sized, young independent firms in high-tech sectors. Therefore, the effect of subsidies on both R&D input and R&D output is compared between independent high-tech young firms (NTBFs), independent low-tech young firms (LTBFs) and their non-independent counterparts. A treatment effects analysis reveals that full crowding-out with regard to public funding is rejected for all firm types. However, the treatment effect is highest for independent high-tech firms. The indirect effect of subsidies on R&D output is evaluated within a patent production framework. These results show that independent high-tech firms have no lower output effects than other firms and thus suggest that the current policy focus on certain firm types is not ineffective.

Suggested Citation

  • Dirk Czarnitzki & Julie Delanote, 2015. "R&D policies for young SMEs: input and output effects," Working Papers Department of Managerial Economics, Strategy and Innovation (MSI) 496828, KU Leuven, Faculty of Economics and Business, Department of Managerial Economics, Strategy and Innovation (MSI).
  • Handle: RePEc:ete:msiper:496828
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    Cited by:

    1. Alessandra Colombelli & Jackie Krafft & Marco Vivarelli, 2016. "To be born is not enough: the key role of innovative start-ups," Small Business Economics, Springer, vol. 47(2), pages 277-291, August.
    2. Stjepan Srhoj & Bruno Skrinjaric & Sonja Radas, 2018. "Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession," Working Papers 1802, The Institute of Economics, Zagreb.
    3. Rehman, Naqeeb Ur, 2015. "Does Internal and External R&D Affect SMEs Innovation Performance? Micro Level Evidence from India and Pakistan," EconStor Preprints 113229, ZBW - German National Library of Economics.
    4. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute for the Study of Labor (IZA).
    5. Colombelli, Alessandra & Krafft, Jackie & Vivarelli, Marco, 2016. "New Firms and Post-Entry Performance: The Role of Innovation," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201601, University of Turin.
    6. Dirk Czarnitzki & Julie Delanote, 2017. "Incorporating innovation subsidies in the CDM framework: empirical evidence from Belgium," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 78-92, February.
    7. Alessandra Colombelli & Jackie Krafft & Marco Vivarelli, 2016. "Entrepreneurship and Innovation: New Entries, Survival, Growth," GREDEG Working Papers 2016-04, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    8. Rehman, Naqeeb Ur, 2016. "Does Internal and External Research and Development Affect Innovation of Small and Medium-Sized Enterprises? Evidence from India and Pakistan," ADBI Working Papers 577, Asian Development Bank Institute.
    9. Liu, Rebecca & Rammer, Christian, 2016. "The contribution of different public innovation funding programs to SMEs' export performance," ZEW Discussion Papers 16-078, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    R&D; subsidies; NTBFs; policy evaluation; treatment effects; patents;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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