Public R&D support and firm performance: A multivariate dose-response analysis

OSIRIS researchers at Statistics Norway have published a 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.

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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.

Published Aug. 12, 2020 12:52 PM - Last modified Sep. 7, 2020 1:28 PM