R&D subsidies and Portuguese firms’ performance: A longitudinal firm-level study

Inês Teixeira, Aurora Teixeira and Luís Santos ()
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Luís Santos: Faculdade de Economia, Universidade do Porto & KU Leuven

No 173, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: The present study analyses the impact of subsidies to Research and Development (R&D), more specifically, the impact of QREN (Quadro de Referência Estratégico Nacional)’s Sistema de Incentivos à Investigação e Desenvolvimento Tecnológico nas Empresa (SI I&DT QREN), on the performance of firms. A relatively wide range of studies explores the relationship between subsidies to R&D and firms’ performance. Nevertheless, no consensus has been reached. Furthermore, the literature that analyses the impact of R&D subsidies in non-market-centred and moderate innovative economies like Portugal is quite scarce and limited. The information used in this empirical study concerns the period between 2008-2017, and it was collected from the Operational Competitiveness Programme (COMPETE) included in QREN and complemented with economic and financial data gathered from the Annual System of Iberian Balances (SABI) database. We compared the performance of firms that in 2014 succeeded in obtaining subsidies to R&D with similar firms that did not receive subsidies. Resorting to information on a set of relevant variables in the period before obtaining the subsidy (2008-2013), we established a trustable comparison group using the Propensity Score Matching (PSM). Then, based on the Average Treatment Effect on the Treated (ATT), we compared firms that received subsidies with those that did not use outcome variables of 2017 (three years after the subsidy), most notably employment, labour productivity, operational results, and exports. Results show that firms that received a public subsidy to R&D three years after receiving the subsidy have higher employment levels and export propensity than those that did not. Notwithstanding, no statistically significant differences were encountered in terms of labour productivity or overall financial performance.

Keywords: R&D subsidies; firms’ performance; propensity score matching; Portugal (search for similar items in EconPapers)
JEL-codes: C31 L25 O32 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2023-07, Revised 2023-07
New Economics Papers: this item is included in nep-cse, nep-eff, nep-eur, nep-ino, nep-sbm and nep-tid
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https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_173.pdf First version, 2023 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0173

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