R&D Subsidies and Company Performance: Evidence from Geographic Variation in Government Funding Based on the ERDF Population-Density Rule

Elias Einiö
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Elias Einiö: VATT (Valtion taloudellinen tutkimuskeskus) and Centre for Economic Performance, London School of Economics

The Review of Economics and Statistics, 2014, vol. 96, issue 4, 710-728

Abstract: Despite the prevalence of R&D support programs, evaluation studies based on explicit differences in support allocation are rare. In this paper, the identification of the causal effect of R&D support on company performance is based on geographic variation in government funding arising from a population-density rule. I find positive impacts on R&D investment, employment, and sales among the participants who were granted an R&D subsidy as a result of additional aggregate R&D support funding in their region. Although there are no instantaneous impacts on productivity, the study provides evidence of long-term productivity gains. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Keywords: R&D; geographical variation; government funding; population; population-density; employment; sales (search for similar items in EconPapers)
JEL-codes: G17 J00 J40 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (53)

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