Impact of Public R&D Financing on Employment

Jyrki Ali-Yrkkö
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Jyrki Ali-Yrkkö: ETLA, the Research Institute of the Finnish Economy

No 39, Economics Working Papers from European Network of Economic Policy Research Institutes

Abstract: This study analyses how public R&D financing impacts the labour demand of companies. To our knowledge, no previous studies have distinguished the impact between a firm’s global and domestic employment. Our company-level panel data covers a period from 1997 to 2002. The statistical method employed in the study takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R&D financing increases both group-level and domestic R&D employment. We also analysed the impact of public R&D funding on employment other than in the R&D area, and found that it is not affected by public funding. It is possible, however, that such funding has an impact in the longer term.

Keywords: Public finance; R&D; employment; research and development; substitute; endogeneity (search for similar items in EconPapers)
Pages: 21 pages
Date: 2005-08
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Citations: View citations in EconPapers (2)

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