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Public R&D support for newly founded firms – effects on patent activity and employment growth

Author

Listed:
  • Uwe Cantner
  • Sarah Kösters

Abstract

By addressing the effectiveness of entrepreneurship policy this paper attempts to fill a gap in the literature. By using a dataset of highly innovative start-ups in the East German state of Thuringia the impact of R&D subsidies on start-ups? employment growth and their patent output is analyzed. Presumed selection biases between subsidized and non-subsidized start-ups are accounted for by conducting propensity score matching. We find that R&D subsidies lead to an increase in employment growth of about 66%. Furthermore, subsidized start-ups show a 2.8 times higher patent output. These estimates provide evidence for the additionality of R&D subsidies within the first three business years. Moreover, our analysis points to a successful policy targeting of academic spin-offs. JEL Codes: O38, H59, C14

Suggested Citation

  • Uwe Cantner & Sarah Kösters, 2015. "Public R&D support for newly founded firms – effects on patent activity and employment growth," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 7-37.
    • Handle: RePEc:cai:jiedbu:jie_016_0007
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    Citations

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    Cited by:

    1. Daunfeldt, Sven-Olov & Halvarsson, Daniel & Gustavsson Tingvall, Patrik & McKelvie, Alexander, 2021. "Do Targeted R&D Grants Towards Potential Highgrowth Firms Increase Employment and Demand for High Human Capital Workers?," HFI Working Papers 23, Institute of Retail Economics (Handelns Forskningsinstitut).
    2. Zofia Gródek-Szostak & Marcin Suder & Anna Szeląg-Sikora & Luis Ochoa Siguencia, 2020. "The “Dobry Czas Na Biznes” (“Good Time for Business”) Program as a Form of Support for Self-Employment in Poland. A Case Study of the Sub-Regions of the Małopolskie Province," Sustainability, MDPI, vol. 12(22), pages 1-17, November.
    3. Michel Dumont, 2019. "Working Paper 04-19 - Tax incentives for business R&D in Belgium - Third evaluation," Working Papers 1904, Federal Planning Bureau, Belgium.
    4. Edoardo Ferrucci & Roberto Guida & Valentina Meliciani, 2021. "Financial constraints and the growth and survival of innovative start‐ups: An analysis of Italian firms," European Financial Management, European Financial Management Association, vol. 27(2), pages 364-386, March.
    5. Kolobova, Valeriya A. & Zyatchin, Andrey V., 2016. "Business Process for the Selection of the Raw MaterialsÙ Supplier on the Example of the Company "Yuzhtehmontazh"," Conference Papers 8676, Graduate School of Management, St. Petersburg State University.
    6. Hottenrott, Hanna & Richstein, Robert, 2020. "Start-up subsidies: Does the policy instrument matter?," Research Policy, Elsevier, vol. 49(1).

    More about this item

    Keywords

    Public Policy Support; Start-Ups; R&D; Policy Evaluation;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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