Picking the Winner? - Empirical Evidence on the Targeting of R&D Subsidies to Start-ups

Uwe Cantner and Sarah Kösters

No 2009-093, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This paper investigates the allocation of R&D subsidies given to start-ups. Considering the coexistence of various R&D project schemes, we take an aggregate view and analyze the determinants of the receipt of (any) R&D subsidies within the first three business years of the start-ups. We argue that policymakers and funding authorities follow a strategy of "picking the winner". Analyzing a unique data set of start-ups in the East German state of Thuringia, we conduct logistic regressions and find ambiguous support. R&D subsidies are given to start-ups with innovative business ideas, especially academic spin-offs. On the other hand, the ambitions and the patent stock of the founder(s) do not decide the receipt of R&D subsidies. These insights into the overall allocation of R&D subsidies are important since they have implications for policy effectiveness and efficiency. The implied difficulties of policy targeting fundamentally question the massive subsidization of private R&D.

Keywords: Start-ups; R&D subsidies; Subsidy allocation (search for similar items in EconPapers)
JEL-codes: L26 L52 O38 (search for similar items in EconPapers)
Date: 2009-11-09
New Economics Papers: this item is included in nep-ent, nep-ino, nep-ipr, nep-pr~, nep-ppm and nep-sbm
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Citations: View citations in EconPapers (4)

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Journal Article: Picking the winner? Empirical evidence on the targeting of R&D subsidies to start-ups (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2009-093

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