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The longer term effects of federal subsidies on firm survival: evidence from the advanced technology program

Author

Listed:
  • Daniel Smith

    (North Carolina Department of Commerce
    University of North Carolina at Chapel Hill)

  • Maryann Feldman

    (University of North Carolina at Chapel Hill)

  • Gary Anderson

    (National Science Foundation)

Abstract

The goal of this paper is to conduct a survival analysis to determine the causal impact of federal R&D subsidies on firms’ long-term survival. The data are small firms which applied to the Advanced Technology Program (ATP) in 1998 and 2000. The ATP’s focus was on ensuring that early stage, high-risk research was eventually commercialized successfully and resulted in broad economic benefits for society overall. This paper therefore explores whether the knowledge and benefits the ATP initially provided to a firm allowed it to more successfully transition future research projects from development and testing to commercialization. This paper utilizes a variant of the Heckman (Econometrica 47(1):153–161, 1979) research design to control for inherent pre-award differences between awarded and non-awarded firms. By using administrative data on reviewer scores, this analysis shows that the impact of ATP on small firm survival is robust to sample selection. This paper’s findings suggest that recei ving an ATP award can have a significant and positive causal effect on firm survival.

Suggested Citation

  • Daniel Smith & Maryann Feldman & Gary Anderson, 2018. "The longer term effects of federal subsidies on firm survival: evidence from the advanced technology program," The Journal of Technology Transfer, Springer, vol. 43(3), pages 593-614, June.
    • Handle: RePEc:kap:jtecht:v:43:y:2018:i:3:d:10.1007_s10961-017-9633-5
    DOI: 10.1007/s10961-017-9633-5
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    3. Helena Lenihan & Kevin Mulligan & Justin Doran & Christian Rammer & Olubunmi Ipinnaiye, 2024. "R&D grants and R&D tax credits to foreign-owned subsidiaries: Does supporting multinational enterprises’ R&D pay off in terms of firm performance improvements for the host economy?," The Journal of Technology Transfer, Springer, vol. 49(2), pages 740-781, April.
    4. Marian Negoita & Annelies Goger, 2024. "State-Level Policies to Incentivize Workplace Learning: Impacts of a California Publicly Funded Employee Training Program," Economic Development Quarterly, , vol. 38(1), pages 15-24, February.
    5. Jiao, Jian-ling & Zhang, Xiao-lan & Tang, Yun-shu, 2020. "What factors determine the survival of green innovative enterprises in China? -- A method based on fsQCA," Technology in Society, Elsevier, vol. 62(C).
    6. Hackler, Darrene & Harpel, Ellen, 2021. "Incentives for Entrepreneurial Firms and Technical and Policy Appendices," MPRA Paper 109173, University Library of Munich, Germany.
    7. Chang, Kai & Long, Yu & Yang, Jiahui & Zhang, Huijia & Xue, Chenqi & Liu, Jianing, 2022. "Effects of subsidy and tax rebate policies on green firm research and development efficiency in China," Energy, Elsevier, vol. 258(C).

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    More about this item

    Keywords

    Federal; R&D; Subsidies; Firm; Survival; Innovation;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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