IDEAS home Printed from https://ideas.repec.org/p/ssb/dispap/911.html
   My bibliography  Save this paper

The impact of public R&D support on firms' patenting

Author

Listed:

Abstract

We examine the impact of both R&D tax credits and direct R&D subsidies on Norwegian firms' patenting. Whereas direct subsidies are aimed at projects with low private and high social return, tax credits do not discriminate between projects or technologies. We find that both direct subsidies and tax credits have significant positive effects on patenting. However, the magnitude of the effects depend critically on the firms' pre-treatment characteristics. In particular, the statistically significant estimates are all related to firms with no patent applications prior to obtaining support. Moreover, we estimate that direct subsidies have triggered at least three times as many granted patents per NOK million of support compared to tax credits. Our results suggest that R&D support should be directed to promote innovations at the extensive margin, i.e. to firms with a high potential of becoming innovative rather than to firms with a record of being innovative. Moreover, as targeted subsidies generate more innovations, society would benefit from distributing more of the subsidies to priority areas.

Suggested Citation

  • Brita Bye & Marit Klemetsen & Arvid Raknerud, 2019. "The impact of public R&D support on firms' patenting," Discussion Papers 911, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:911
    as

    Download full text from publisher

    File URL: https://www.ssb.no/en/forskning/discussion-papers/_attachment/393391
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dechezlepretre, Antoine & Martin, Ralf & Mohnen, Myra, 2014. "Knowledge spillovers from clean and dirty technologies," LSE Research Online Documents on Economics 60501, London School of Economics and Political Science, LSE Library.
    2. Raffaello Bronzini & Eleonora Iachini, 2014. "Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 100-134, November.
    3. Czarnitzki, Dirk & Lopes-Bento, Cindy, 2013. "Value for money? New microeconometric evidence on public R&D grants in Flanders," Research Policy, Elsevier, vol. 42(1), pages 76-89.
    4. Marit E. Klemetsen & Brita Bye & Arvid Raknerud, 2018. "Can Direct Regulations Spur Innovations in Environmental Technologies? A Study on Firm‐Level Patenting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(2), pages 338-371, April.
    5. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    6. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    7. Charles Bérubé & Pierre Mohnen, 2009. "Are firms that receive R&D subsidies more innovative?," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 206-225, February.
    8. Esther Ann Bøler & Andreas Moxnes & Karen Helene Ulltveit-Moe, 2015. "R&D, International Sourcing, and the Joint Impact on Firm Performance," American Economic Review, American Economic Association, vol. 105(12), pages 3704-3739, December.
    9. Moretti, Enrico & Wilson, Daniel J., 2014. "State incentives for innovation, star scientists and jobs: Evidence from biotech," Journal of Urban Economics, Elsevier, vol. 79(C), pages 20-38.
    10. Antoine Dechezleprêtre & Ralf Martin & Myra Mohnen, "undated". "Knowledge spillovers from clean and dirty technologies: a patent citation analysis," SIMPATIC Working Papers 954, Bruegel.
    11. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    12. Bronzini, Raffaello & Piselli, Paolo, 2016. "The impact of R&D subsidies on firm innovation," Research Policy, Elsevier, vol. 45(2), pages 442-457.
    13. Almus, Matthias & Czarnitzki, Dirk, 2003. "The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 226-236, April.
    14. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
    15. Lokshin, Boris & Mohnen, Pierre, 2013. "Do R&D tax incentives lead to higher wages for R&D workers? Evidence from The Netherlands," Research Policy, Elsevier, vol. 42(3), pages 823-830.
    16. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
    17. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
    18. Antoine Dechezleprêtre & Matthieu Glachant & Ivan Haščič & Nick Johnstone & Yann Ménière, 2011. "Invention and Transfer of Climate Change--Mitigation Technologies: A Global Analysis," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 109-130, Winter.
    19. Raphael Calel & Antoine Dechezleprêtre, 2016. "Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 173-191, March.
    20. repec:bre:wpaper:954 is not listed on IDEAS
    21. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models," Cambridge Books, Cambridge University Press, number 9780521405515, January.
    22. Guimarães, Paulo, 2008. "The fixed effects negative binomial model revisited," Economics Letters, Elsevier, vol. 99(1), pages 63-66, April.
    23. Griliches, Zvi, 1998. "R&D and Productivity," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226308869, July.
    24. Hall, Bronwyn & Van Reenen, John, 2000. "How effective are fiscal incentives for R&D? A review of the evidence," Research Policy, Elsevier, vol. 29(4-5), pages 449-469, April.
    25. Zvi Griliches, 1998. "R&D and Productivity: The Econometric Evidence," NBER Books, National Bureau of Economic Research, Inc, number gril98-1, June.
    26. Ådne Cappelen & Erik Fjærli & Frank Foyn & Torbjørn Hægeland & Jarle Møen & Arvid Raknerud & Marina Rybalka, 2010. "Evaluation of the Norwegian R&D tax credit scheme," Discussion Papers 640, Statistics Norway, Research Department.
    27. Christian Helmers & Mark RogersPhilipp Schautschick, 2011. "Intellectual Property at the Firm-Level in the UK: The Oxford Firm-Level Intellectual Property Database," Economics Series Working Papers 546, University of Oxford, Department of Economics.
    28. Arvid Raknerud & Diana-Cristina Iancu & Øivind A. Nilsen, 2018. "Public R&D Support and Firms’ Performance. A Panel Data Study," Discussion Papers 878, Statistics Norway, Research Department.
    29. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    30. Gourieroux,Christian & Monfort,Alain, 1995. "Statistics and Econometric Models 2 volume set," Cambridge Books, Cambridge University Press, number 9780521478373, July.
    31. Yann Ménière & Antoine Dechezleprêtre & Matthieu Glachant & Ivan Hascic & N. Johnstone, 2011. "Invention and transfer of climate change mitigation technologies: a study drawing on patent data," Post-Print hal-00869795, HAL.
    32. Bruno Van Pottelsberghe & Herman Denis & Dominique Guellec, 2001. "Using patent counts for cross-country comparisons of technology output," ULB Institutional Repository 2013/6227, ULB -- Universite Libre de Bruxelles.
    33. Dumont, Michel, 2017. "Assessing the policy mix of public support to business R&D," Research Policy, Elsevier, vol. 46(10), pages 1851-1862.
    34. Cappelen, Ådne & Raknerud, Arvid & Rybalka, Marina, 2012. "The effects of R&D tax credits on patenting and innovations," Research Policy, Elsevier, vol. 41(2), pages 334-345.
    35. Tarasconi, Gianluca & Kang, Byeongwoo, 2015. "PATSTAT revisited," IDE Discussion Papers 527, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    36. Hélène Dernis & Mosahid Khan, 2004. "Triadic Patent Families Methodology," OECD Science, Technology and Industry Working Papers 2004/2, OECD Publishing.
    37. Antoine Dechezleprêtre & Matthieu Glachant & Ivan Haščič & Nick Johnstone & Yann Ménière, 2011. "Invention and Transfer of Climate Change--Mitigation Technologies: A Global Analysis," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 109-130, Winter.
    38. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sharif, Naubahar & Chandra, Kevin & Mansoor, Athar & Sinha, Kirti Bhasin, 2021. "A comparative analysis of research and development spending and total factor productivity growth in Hong Kong, Shenzhen, Singapore," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 108-120.
    2. Nilsen, Øivind A. & Raknerud, Arvid & Iancu, Diana-Cristina, 2020. "Public R&D support and firm performance: A multivariate dose-response analysis," Research Policy, Elsevier, vol. 49(7).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marit E. Klemetsen, 2015. "The effects of innovation policies on firm level patenting," Discussion Papers 830, Statistics Norway, Research Department.
    2. Nilsen, Øivind A. & Raknerud, Arvid & Iancu, Diana-Cristina, 2020. "Public R&D support and firm performance: A multivariate dose-response analysis," Research Policy, Elsevier, vol. 49(7).
    3. Marit E. Klemetsen & Brita Bye & Arvid Raknerud, 2018. "Can Direct Regulations Spur Innovations in Environmental Technologies? A Study on Firm‐Level Patenting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(2), pages 338-371, April.
    4. Thomas H. W. Ziesemer, 2021. "The Effects of R&D Subsidies and Publicly Performed R&D on Business R&D: A Survey," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 171-205, March.
    5. Aiello, Francesco & Albanese, Giuseppe & Piselli, Paolo, 2019. "Good value for public money? The case of R&D policy," Journal of Policy Modeling, Elsevier, vol. 41(6), pages 1057-1076.
    6. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Working Paper Series rwp00-002, Harvard University, John F. Kennedy School of Government.
    7. Cameron Hepburn & Jacquelyn Pless & David Popp, 2018. "Policy Brief—Encouraging Innovation that Protects Environmental Systems: Five Policy Proposals," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 154-169.
    8. Arvid Raknerud & Diana-Cristina Iancu & Øivind A. Nilsen, 2018. "Public R&D Support and Firms’ Performance. A Panel Data Study," Discussion Papers 878, Statistics Norway, Research Department.
    9. Wang, Yanbo & Li, Jizhen & Furman, Jeffrey L., 2017. "Firm performance and state innovation funding: Evidence from China’s innofund program," Research Policy, Elsevier, vol. 46(6), pages 1142-1161.
    10. Grafström, Jonas & Söderholm, Patrik & Gawel, Erik & Lehmann, Paul & Strunz, Sebastian, 2017. "Knowledge accumulation from public renewable energy R&D in the European Union: Converging or diverging trends?," UFZ Discussion Papers 5/2017, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    11. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516, Elsevier.
    12. Bruns, Stephan B. & Kalthaus, Martin, 2020. "Flexibility in the selection of patent counts: Implications for p-hacking and evidence-based policymaking," Research Policy, Elsevier, vol. 49(1).
    13. David Popp, 2019. "Environmental policy and innovation: a decade of research," CESifo Working Paper Series 7544, CESifo.
    14. Fabrizio, Kira R. & Poczter, Sharon & Zelner, Bennet A., 2017. "Does innovation policy attract international competition? Evidence from energy storage," Research Policy, Elsevier, vol. 46(6), pages 1106-1117.
    15. Liu, Rebecca & Rammer, Christian, 2016. "The contribution of different public innovation funding programs to SMEs' export performance," ZEW Discussion Papers 16-078, ZEW - Leibniz Centre for European Economic Research.
    16. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
    17. Aalto, Eero & Gustafsson, Robin, 2020. "Innovation Promotion Rationales and Impacts – A Review," ETLA Reports 99, The Research Institute of the Finnish Economy.
    18. Bronzini, Raffaello & Piselli, Paolo, 2016. "The impact of R&D subsidies on firm innovation," Research Policy, Elsevier, vol. 45(2), pages 442-457.
    19. Antoine Dechezlepretre & Elias Einio & Ralf Martin & Kieu-Trang Nguyen & John Van Reenen, 2016. "Do tax incentives for research increase firm innovation? An RD design for R&D," GRI Working Papers 230, Grantham Research Institute on Climate Change and the Environment.
    20. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.

    More about this item

    Keywords

    Patenting; R&D policy; Treatment effects; Stratification; Matching; Poisson regression;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssb:dispap:911. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: L Maasø (email available below). General contact details of provider: https://edirc.repec.org/data/ssbgvno.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.