Assessing the impact of public innovation support on SMEs productivity: the critical role of regional disparities

Raphaël Chiappini and Sophie Pommet
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Raphaël Chiappini: BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Sophie Pommet: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur

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Abstract: This study examines regional disparities in both the allocation and impact of a French financial innovation support program for SMEs, assessing its effects on firm-level Total Factor Productivity, labor productivity, and intangibles-to-assets ratio as indicators of firm efficiency and innovativeness. Using a quasi-experimental design, our analysis reveals that firms in the Paris region experience significantly greater benefits from innovation support compared to those in other regions. This disparity in policy effectiveness is strongly influenced by localization and urbanization economies, as well as substantial knowledge spillovers, which are more prevalent in highly agglomerated regions like Paris. These factors amplify the effectiveness of public support, suggesting that densely networked innovation ecosystems enhance firms' ability to leverage public funding for productivity and innovation gains. Our findings underscore the importance of considering regional agglomeration effects in the design of innovation policies to address existing heterogeneity in policy impact.

Date: 2026-04-25
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Published in Industrial and Corporate Change, 2026, ⟨10.1093/icc/dtag022⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05603300

DOI: 10.1093/icc/dtag022

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