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The elusive impact of R&D grants on firm productivity

Fernando Alexandre (), Diogo Ferreira (), Sandro Mendonça () and Miguel Portela ()
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Fernando Alexandre: NIPE/Center for Research in Economics and Management, University of Minho, Portugal
Diogo Ferreira: NIPE/Center for Research in Economics and Management, University of Minho, Portugal
Sandro Mendonça: Business Research Unit (BRU-IUL), University Institute of Lisbon; Research Unit on Complexity and Economics (UECE), Research in Economics and Mathematics (REM), Lisbon School of Economics & Management (ISEG), University of Lisbon; Science Policy Research Unit (SPRU), University of Sussex.
Miguel Portela: NIPE/Center for Research in Economics and Management, University of Minho, Portugal; IZA, Bonn

No 08/2023, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: This paper evaluates the effectiveness of R&D subsidies, provided by the European Regional Development Funds, on firms’ productivity. Using detailed longitudinal firm-level data covering the period 2007-2019, we employ state of the art differences-in-differences estimators to evaluate the impacts of R&D grants. Positive causal effects on gross value added and labour productivity are discernible for micro- and small-sized firms participating in co-promotion but not in individual projects. However, these effects seem to be elusive. No evidence of a positive effect of these grants on firm performance for medium- and large-sized firms or for individual R&D projects is found. This investigation contributes to a more comprehensive understanding of the relative effectiveness of productivity enhancement programs.

Keywords: R&D grants; productivity; European funds; co-promotion (search for similar items in EconPapers)
JEL-codes: D22 H25 L25 L52 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ent, nep-eur, nep-ppm, nep-sbm and nep-tid
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