IDEAS home Printed from https://ideas.repec.org/p/ris/uncgec/2011_017.html
   My bibliography  Save this paper

Employment Growth from Public Support of Innovation in Small Firms

Author

Listed:
  • Link, Albert N.

    (University of North Carolina at Greensboro, Department of Economics)

  • Scott, John T.

    (Dartmouth College)

Abstract

We investigate the impacts of the U.S. publicly-funded Small Business Innovation Research (SBIR) program’s funding on the overall employment growth of SBIR-award recipient firms. This paper is motivated by the U.S. Congress’ continued emphasis of employment growth during its deliberations on the reauthorization of the SBIR program. We set forth a model of employment growth; the model offers a framework through which we can compare the firm’s actual level of employment after receipt of an SBIR award and completion of the research project to the level of employment predicted by the firm’s characteristics prior to the award. Using data collected by the National Research Council within the National Academies, we estimate our model, and we conclude that, on average, the overall employment effects associated with the SBIR program are large absolutely and relative to dollars of funding, but these effects are, in general, not statistically significant.

Suggested Citation

  • Link, Albert N. & Scott, John T., 2011. "Employment Growth from Public Support of Innovation in Small Firms," UNCG Economics Working Papers 11-17, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2011_017
    as

    Download full text from publisher

    File URL: https://bryan.uncg.edu/wp-content/uploads/2018/02/11-17.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Albert N. Link & John T. Scott, 2013. "Governments as entrepreneur: Evaluating the commercialization success of SBIR projects," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 2, pages 25-38, Edward Elgar Publishing.
    2. Albert N. Link & John T. Scott, 2013. "Private Investor Participation and Commercialization Rates for Government-sponsored Research and Development: Would a Prediction Market Improve the Performance of the SBIR Programme?," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 11, pages 157-174, Edward Elgar Publishing.
    3. Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
    4. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
    5. Carlsson, Bo, 1992. "The Rise of Small Business: Causes and Consequences," Working Paper Series 357, Research Institute of Industrial Economics.
    6. Scott, John T & Pascoe, George, 1986. "Beyond Firm and Industry Effects on Profitability in Imperfect Market s," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 284-292, May.
    7. Vivarelli, Marco, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute of Labor Economics (IZA).
    8. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    9. Mie Augier & David J. Teece, 2007. "Dynamic capabilities and multinational enterprise: Penrosean insights and omissions," Management International Review, Springer, vol. 47(2), pages 175-192, March.
    10. David Blanchflower & Simon Burgess, 1998. "New Technology And Jobs: Comparative Evidence From A Two Country Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(2-4), pages 109-138.
    11. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    12. Valeria Mastrostefano & Mario Pianta, 2009. "Technology and jobs," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(8), pages 729-741.
    13. Albert N. Link & John T. Scott, 2013. "Employment growth from public support of innovation in small firms," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 3, pages 41-64, Edward Elgar Publishing.
    14. Albert Link & John Scott, 2006. "U.S. University Research Parks," Journal of Productivity Analysis, Springer, vol. 25(1), pages 43-55, April.
    15. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    16. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    17. Marco Vivarelli, 2015. "Innovation and employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 154-154, May.
    18. Gregory Tassey, 2007. "Tax incentives for innovation: time to restructure the R&E tax credit," The Journal of Technology Transfer, Springer, vol. 32(6), pages 605-615, December.
    19. Jonathan Michie & Christine Oughton & Mario Pianta, 2002. "Innovation and the Economy," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 253-264.
    20. Robert Atkinson, 2007. "Expanding the R&E tax credit to drive innovation, competitiveness and prosperity," The Journal of Technology Transfer, Springer, vol. 32(6), pages 617-628, December.
    21. Schultz, Theodore W, 1980. " Investment in Entrepreneurial Ability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 82(4), pages 437-448.
    22. Josh Lerner, 2010. "The future of public efforts to boost entrepreneurship and venture capital," Small Business Economics, Springer, vol. 35(3), pages 255-264, October.
    23. Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
    24. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
    25. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
    26. Ashley J. Stevens, 2004. "The Enactment of Bayh--Dole," The Journal of Technology Transfer, Springer, vol. 29(1), pages 93-99, January.
    27. Doms, Mark & Dunne, Timothy & Roberts, Mark J., 1995. "The role of technology use in the survival and growth of manufacturing plants," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 523-542, December.
    28. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    29. John Scott, 1984. "Firm versus Industry Variability in R&D Intensity," NBER Chapters, in: R&D, Patents, and Productivity, pages 233-248, National Bureau of Economic Research, Inc.
    30. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albert N. Link & John T. Scott, 2013. "Employment growth from the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 4, pages 65-88, Edward Elgar Publishing.
    2. Barry Bozeman & Albert N. Link, 2015. "Toward an assessment of impacts from US technology and innovation policies," Science and Public Policy, Oxford University Press, vol. 42(3), pages 369-376.
    3. Francesco Bogliacino & Matteo Lucchese & Mario Pianta, 2011. "Job creation in business services:Innovation, Demand, Polarisation," Working Papers 1107, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2011.
    4. Guidi, Francesco & Solomon, Edna & Trushin, Eshref & Ugur, Mehmet, 2015. "Inverted-U relationship between innovation and survival: Evidence from firm-level UK data," EconStor Preprints 110896, ZBW - Leibniz Information Centre for Economics.
    5. Waheed, Abdul, 2012. "Employment effect of innovation: microdata evidence from Bangladesh and Pakistan," MERIT Working Papers 2012-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2016. "Innovation and job creation: a sustainable relation?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 189-213, August.
    7. Haifeng Qian & Kingsley Haynes, 2014. "Beyond innovation: the Small Business Innovation Research program as entrepreneurship policy," The Journal of Technology Transfer, Springer, vol. 39(4), pages 524-543, August.
    8. Christopher S. Hayter, 2015. "Social Networks and the Success of University Spin-offs," Economic Development Quarterly, , vol. 29(1), pages 3-13, February.
    9. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 455-488, June.
    10. David B. Audretsch & Dennis P. Leyden & Albert N. Link, 2013. "Regional Appropriation of University-Based Knowledge and Technology for Economic Development," Economic Development Quarterly, , vol. 27(1), pages 56-61, February.
    11. Albert N. Link & John T. Scott, 2013. "Bending the Arc of Innovation: Public Support of R&D in Small, Entrepreneurial Firms," Science, Technology, and Innovation Policy, Palgrave Macmillan, number 978-1-137-37088-4, December.
    12. Abdul Waheed, 2017. "The Employment Effect of Innovation: Evidence from Bangladesh and Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 56(2), pages 105-126.
    13. Hiroyasu Inoue & Eiichi Yamaguchi, 2017. "Evaluation of the Small Business Innovation Research Program in Japan," SAGE Open, , vol. 7(1), pages 21582440176, February.
    14. Stuart D. Allen & Stephen K. Layson & Albert N. Link, 2013. "Public gains from entrepreneurial research: Inferences about the economic value of public support of the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 6, pages 105-112, Edward Elgar Publishing.
    15. Coad, Alex & Segarra, Agustí & Teruel, Mercedes, 2013. "Like milk or wine: Does firm performance improve with age?," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 173-189.
    16. Geurts, Karen & Van Biesebroeck, Johannes, 2016. "Firm creation and post-entry dynamics of de novo entrants," International Journal of Industrial Organization, Elsevier, vol. 49(C), pages 59-104.
    17. Blonigen, Bruce A. & Tomlin, KaSaundra, 2001. "Size and growth of Japanese plants in the United States," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 931-952, May.
    18. Albert N. Link & Christopher J. Ruhm & Donald S. Siegel, 2014. "Private Equity and the Innovation Strategies of Entrepreneurial Firms: Empirical Evidence from the Small Business Innovation Research Program," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(2), pages 103-113, March.
    19. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2011. "Financial and economic determinants of firm default," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 373-406, August.
    20. Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2018. "Age and productivity as determinants of firm survival over the industry life cycle," Industry and Innovation, Taylor & Francis Journals, vol. 25(2), pages 167-198, February.

    More about this item

    Keywords

    Employment growth; Entrepreneurship; Innovation; Technology; Small business;
    All these keywords.

    JEL classification:

    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:uncgec:2011_017. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Albert Link (email available below). General contact details of provider: https://edirc.repec.org/data/edncgus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.