Can large-scale RDI funding stimulate post-crisis recovery growth? Evidence for Finland during COVID-19
Timo Mitze and
Teemu Makkonen
Technological Forecasting and Social Change, 2023, vol. 186, issue PB
Abstract:
The COVID-19 pandemic and subsequent public health restrictions led to a significant slump in economic activities around the globe. This slump has been met by various policy actions to cushion the detrimental socio-economic consequences of the COVID-19 crisis and eventually bring the economy back on track. We provide an ex-ante evaluation of the effectiveness of a massive expansion of RDI funding in Finland to stimulate post-crisis recovery growth through an increase in RDI activities of Finnish firms. We make use of the fact that novel RDI grants for firms in disruptive circumstances granted in 2020 were allocated through established RDI policy channels. This allows us to estimate the structural link between RDI funding and economic growth for Finnish NUTS-3 regions based on pre-COVID-19 data. Estimates are then used to predict regional recovery growth out of sample and to quantify the growth contribution of RDI funding. Depending on the chosen scenario, our out-of-sample predictions point to a mean recovery growth rate of GDP between ~2–4 % in 2021 after a decline of up to −2.5 % in 2020. RDI funding constitutes a significant pillar of the recovery process with mean contributions in terms of GDP growth of between 0.4 and 1 %-points.
Keywords: GDP forecasts; Regional growth; RDI funding; Post-crisis recovery; COVID-19; Finland (search for similar items in EconPapers)
JEL-codes: C23 C53 H50 O38 R12 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0040162522005947
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Can large-scale R&I funding stimulate post-crisis recovery growth? Evidence for Finland during COVID-19 (2021) ![Downloads](/downloads_econpapers.gif)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:186:y:2023:i:pb:s0040162522005947
DOI: 10.1016/j.techfore.2022.122073
Access Statistics for this article
Technological Forecasting and Social Change is currently edited by Fred Phillips
More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).