Public R&D Support and Firms' Performance - A Panel Data Study

33 Pages Posted: 24 Aug 2018

See all articles by Øivind Anti Nilsen

Øivind Anti Nilsen

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Arvid Raknerud

Statistics Norway - Research Department

Diana‐Cristina Iancu

Statistics Norway

Date Written: July 03, 2018

Abstract

We analyse all the major sources of direct and indirect R&D subsidies in Norway in the period 2002-2013 and compare their effects on individual firms’ performance. Firms that received support are matched with a control group of firms that did not receive support using a combination of stratification and propensity score matching. Changes in performance indicators before and after support in the treatment group are compared with contemporaneous changes in the control group. We find that the average effects of R&D support among those who obtained grants and/or subsidies are positive and significant in terms of performance indicators related to economic growth: value added, sales revenue and number of employees. The estimated effects are larger for start-up firms than incumbent firms when the effects are measured as relative effects (in percentage points), but smaller when these effects are translated into level effects. Finally, we do not find positive effects on return to total assets or productivity for firms who received support compared with the control group.

Keywords: public policy, firm performance, treatment effects, stratification, propensity score matching, productivity

JEL Classification: C330, C520, D240, O380

Suggested Citation

Nilsen, Oivind Anti and Raknerud, Arvid and Iancu, Diana‐Cristina, Public R&D Support and Firms' Performance - A Panel Data Study (July 03, 2018). CESifo Working Paper Series No. 7131, Available at SSRN: https://ssrn.com/abstract=3235292 or http://dx.doi.org/10.2139/ssrn.3235292

Oivind Anti Nilsen (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Arvid Raknerud

Statistics Norway - Research Department ( email )

P.O. Box 8131 Dep, N-0033
N-0033 Oslo
Norway

Diana‐Cristina Iancu

Statistics Norway ( email )

N-0033 Oslo
Norway

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