Serving the right menu of R&D policy instruments to firms: An analysis of policy mix sequencing

Helena Lenihahn, Kevin Mulligan (), Mauricio Perez-Alaniz and Christian Rammer

No 23-009, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The R&D policy instrument mix concept has become increasingly important for understanding how public R&D support drives firm-level R&D. To-date, empirical studies have conceptualised the instrument mix as a static unit, whereby firms receive multiple policy instruments at one point in time. However, firms can also receive multiple instruments in a sequence, over time. While sequencing is well rehearsed heoretically, this remains a major gap in the empirical literature. Our study evaluates, for the first time, how R&D policy instrument mix sequencing impacts firm-level R&D. We construct a unique dataset, containing almost 25,000 firm-year observations over a 17-year period for Ireland. Our analysis focuses on R&D grants, R&D tax credits, and publicly-supported academic-industry collaborations, and develops two novel approaches to measure R&D policy instrument mix sequencing. Our results suggest that R&D policy instrument mix sequencing is highly effective at driving firm-level R&D, but that some sequences are more effective than others. These findings highlight opportunities to realise superior policy outcomes through targeted sequencing.

Keywords: Policy mix; Policy instrument mix sequencing; Public R&D support; R&D grant; R&D tax credit; Academic-industry collaboration (search for similar items in EconPapers)
JEL-codes: D04 D22 O25 O30 O31 O38 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ino, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:23009

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