New journal article: Public R&D support and firm performance
OSIRIS researchers at Statistics Norway have published an article analyzing the impact of all major sources of direct and indirect R&D subsidies to industries in Norway during the period 2002-2013.
The output additionality of support to incumbent firms that regularly perform R&D (R&D-incumbents), which obtain about 65 per cent of all R&D support to business enterprises, is insignificant for any instrument or policy mixture. However, the estimated additionality of support to R&D-starters (firms without prior R&D activity), which obtain about 30 per cent of all R&D support, is generally positive. In this firm category, the main instruments for direct R&D support in Norway generate significantly less output and economic activity per NOK 1 million in support than do tax credits, despite the fact these instruments manage large project portfolios at considerable administrative costs. The findings do not identify positive effects of R&D support on labour productivity or the return on assets for any of the instruments.
The main policy implication is that R&D instruments for the business enterprise sector should be designed in favour of R&D-starters over R&D-incumbents, that is, shifting the focus from the intensive to the extensive margin.
Read the entire article here.