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The impact of R&D subsidy on innovation: a study of New Zealand firms

Author

Listed:
  • Adam Jaffe

    () (Motu Economic and Public Policy Research)

  • Trinh Le

    () (Motu Economic and Public Policy Research)

Abstract

This paper examines the impact of government assistance through R&D grants on innovation output for firms in New Zealand. Using a large database that links administrative and tax data with survey data, we are able to control for large number of firm characteristics and thus minimise selection bias. We find that receipt of an R&D grant significantly increases the probability that a firm in the manufacturing and service sectors applies for a patent during 2005–2009, but no positive impact is found on the probability of applying for a trademark. Using only firms that participated in the Business Operation Survey, we find that receiving a grant almost doubles the probability that a firm introduces new goods and services to the world while its effects on process innovation and any product innovation are relatively much weaker. Moreover, there is little evidence that grant receipt has differential effects between small to medium (

Suggested Citation

  • Adam Jaffe & Trinh Le, 2015. "The impact of R&D subsidy on innovation: a study of New Zealand firms," Working Papers 15_08, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:15_08
    as

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    References listed on IDEAS

    as
    1. Mendonca, Sandro & Pereira, Tiago Santos & Godinho, Manuel Mira, 2004. "Trademarks as an indicator of innovation and industrial change," Research Policy, Elsevier, vol. 33(9), pages 1385-1404, November.
    2. Charles Bérubé & Pierre Mohnen, 2009. "Are firms that receive R&D subsidies more innovative?," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 206-225, February.
    3. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    4. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    5. Jacques Mairesse & Pierre Mohnen, 2005. "The Importance of R&D for Innovation: A Reassessment Using French Survey Data," The Journal of Technology Transfer, Springer, vol. 30(2_2), pages 183-197, January.
    6. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    7. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
    8. repec:fth:harver:1473 is not listed on IDEAS
    9. Richard Fabling, 2009. "A Rough Guide to New Zealand's Longitudinal Business Database," Global COE Hi-Stat Discussion Paper Series gd09-103, Institute of Economic Research, Hitotsubashi University.
    10. Meindert Flikkema & Ard-Pieter De Man & Carolina Castaldi, 2014. "Are Trademark Counts a Valid Indicator of Innovation? Results of an In-Depth Study of New Benelux Trademarks Filed by SMEs," Industry and Innovation, Taylor & Francis Journals, vol. 21(4), pages 310-331, May.
    11. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
    12. Davide Antonioli & Alberto Marzucchi & Sandro Montresor, 2014. "Regional Innovation Policy and Innovative Behaviour: Looking for Additional Effects," European Planning Studies, Taylor & Francis Journals, vol. 22(1), pages 64-83, January.
    13. Sea-Jin Chang & Jaiho Chung & Jon Jungbien Moon, 2013. "When do foreign subsidiaries outperform local firms?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(8), pages 853-860, October.
    14. Bronzini, Raffaello & Piselli, Paolo, 2016. "The impact of R&D subsidies on firm innovation," Research Policy, Elsevier, vol. 45(2), pages 442-457.
    15. repec:eee:touman:v:33:y:2012:i:4:p:776-789 is not listed on IDEAS
    16. 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.
    17. Les Oxley & Shangqin Hong & Philip McCann, 2013. "Why Size Maters: Investigating the Drivers of Innovation and Economic Performance in New Zealand using the Business Operation Survey," Working Papers in Economics 13/13, University of Waikato.
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    Cited by:

    1. Lu, Chao & Liu, Hu-Chen & Tao, Jie & Rong, Ke & Hsieh, Ying-Che, 2017. "A key stakeholder-based financial subsidy stimulation for Chinese EV industrialization: A system dynamics simulation," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 1-14.
    2. Chiara Criscuolo & Ralf Martin & Henry G. Overman & John Van Reenen, 2012. "Some Causal Effects of an Industrial Policy," CEP Discussion Papers dp1113, Centre for Economic Performance, LSE.
    3. Xu, Kun & Guan, Zhihua & Xu, Wenli, 2015. "省级财政支出效率空间溢出效应研究:基于超效率dea和gsm模型
      [Study on Spatial Spillover Effect of Provincial Fiscal Efficiency: Based on Super-Efficient DEA and GSM Model]
      ," MPRA Paper 71132, University Library of Munich, Germany.
    4. repec:oup:renvpo:v:12:y:2018:i:1:p:154-169. is not listed on IDEAS

    More about this item

    Keywords

    Industrial policy; innovation; R&D;

    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
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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