Innovation Performance and the Signal Effect: Evidence from a European Program

Nadine Levratto () and Aurelien Quignon
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Nadine Levratto: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Aurelien Quignon: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper seeks to estimate the effect of a European policy that subsidizes innovation investments. By carefully selecting observables, we compare recipients of the program with non-recipient firms to overcome the endogeneity of R&D grants. We conduct a difference-indifferences design on the universe of a unique firm-level dataset of European SMEs between 2008 and 2017. We find a significant effect of proof of concept grants, which implies an increase in the number of patent applications and the probability of patenting. There are positive impacts on credit financing, which suggest a signal effect to investors about the project quality of young firms.

Keywords: Innovation; Patent; Financing constraints; H2020; R&D subsidies (search for similar items in EconPapers)
Date: 2021-12-06
New Economics Papers: this item is included in nep-ent, nep-eur, nep-ino, nep-ipr, nep-ppm, nep-sbm and nep-tid
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