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

Aurélien Quignon and Nadine Levratto

No 2021-34, EconomiX Working Papers from University of Paris Nanterre, EconomiX

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-in-differences 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 patentapplications 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: R&D subsidies; Innovation; Patent; Financing constraints; H2020 (search for similar items in EconPapers)
JEL-codes: G28 G32 O30 O38 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2021
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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