The effect of subsidies on R&D investment and success: do subsidy history and size matter?

This study provides insights into the effects of public R&D grants on R&D input and output of firms from Germany. Previous research has shown that the allocation of R&D project grants is rather stable regarding the pool of beneficiaries. The question is whether this participation pattern can be justified by its realized effects. In addition, the impact of the grant size on the effects is investigated. Therefore, I allow to a certain extent for heterogeneous treatment effects in these two dimensions. Using a sample of about 8,500 observations, a non-parametric matching approach with multiple treatments is applied to estimate the effects of public R&D grants on firm's R&D input. The results show that particularly frequently given grants as well as medium and large grants are suitable to increase the scope of firm-financed R&D plans. For the analysis of the effects on firm's R&D output the R&D expenditures are disentangled in R&D which would have been spent in the absence of the grant and publicly induced R&D, including the grant and the effect on private R&D expenditures. Basically both types of R&D are equally productive in terms of innovative output. For the statement that a rather stable pattern of program participation leads to a lower effectiveness of the instrument no evidence has been found. --R&D,Public Subsidies,Innovative Performance,Germany

Empirical evidence on the success of R&D co-operation: Happy together?

In this paper we analyse the effect of R&D co-operation on firms? innovation performance. We investigate the effect of past co-operation on current sales of innovative products, distinguishing between products new to the firm and new to the market, and on cost reductions due to innovative processes. Particular attention is paid to the impact of different co-operation partners. The analysis rests on firm-level data from two consecutive waves of the annual German innovation survey. We find that innovative firms that cooperate have a higher share of turnover with market novelties and a higher share of cost reduction due to process innovations than non-cooperating firms. In particular, R&D cooperation with research institutes has a positive influence on a firm's economic success with market novelties, while R&D co-operation with competitors leads to an increase in the cost reduction attributable to innovative processes. --R&D Co-operation,Innovation Success,Germany,Applied Econometrics

Successful Patterns of Scientific Knowledge Sourcing: Mix and Match

Valuable knowledge emerges increasingly outside of firm boundaries, in particular in public research institutions and universities. The question is how firms organize their interactions with universities effectively to acquire knowledge and apply it successfully. Literature has so far largely ignored that firms may combine different types of interactions with universities for optimizing their collaboration strategies. We argue conceptually that firms need diverse (broad) and highly developed (deep) combinations of various interactions with universities to maximize returns from these collaborations. Our empirical investigation rests upon a survey of more than 800 firms in Germany. We find that both the diversity and intensity of collaborative engagements with universities propel innovation success. However, broadening the spectrum of interactions is more beneficial with regard to innovation success. Applying latent class cluster analysis we identify four distinct patterns of interaction. Our findings show that formal forms of interaction (joint/contract) research provide the best balance between joint knowledge development and value capture. --Technology transfer,industry-science links,open innovation,university knowledge

Innovation on Demand: Can Public Procurement Drive Market Success of Innovations

Public procurement has been at the centre of recent discussions on innovation policy on both European and national levels (e.g., Aho-Report, Barcelona Strategy). It has a large potential to stimulate innovation since it accounts for 16% of combined EU-15 GDP. We embed public procurement for innovation into the broader framework of public policies to stimulate innovation: regulations, R&D subsidies and knowledge infrastructure (i.e. basic research at universities). We synthesize the characteristics of all four instruments based on existing literature and quantitatively compare their effects on innovation success. Our empirical investigation rests upon a survey of more than 1,100 innovative firms in Germany. Our survey puts us in the position to trace all sources of valuable innovation impulses, namely public customers, law and regulations, universities and public funding for R&D. We relate these sources back to innovation success. We find that (non-defense related) public procurement and knowledge spillovers from universities propel innovation success equally. In a second step, we explore whether these effects vary across firms (e.g. size, location, industry). The benefits of university knowledge apply uniformly to all firms. However, public procurement is especially effective for smaller firms in regions under economic stress as well as in distributive and technological services. Based on these findings targeted policy recommendations can be developed. --Innovation policy,public procurement,comparison of instruments,innovation success

ERAWATCH Country Reports 2011: Germany

The main objective of the ERAWATCH Annual Country Reports is to characterise and assess the performance of national research systems and related policies in a structured manner that is comparable across countries. EW Country Reports 2011 identify the structural challenges faced by national innovation systems. They further analyse and assess the ability of the policy mix in place to consistently and efficiently tackle these challenges. The annex of the reports gives an overview of the latest national policy efforts towards the enhancement of European Research Area and further assess their efficiency to achieve the targets. These reports were originally produced in November - December 2011, focusing on policy developments over the previous twelve months. The reports were produced by the ERAWATCH Network under contract to JRC-IPTS. The analytical framework and the structure of the reports have been developed by the Institute for Prospective Technological Studies of the Joint Research Centre (JRC-IPTS) and Directorate General for Research and Innovation with contributions from ERAWATCH Network AsblJRC.J.2-Knowledge for Growt

The effect of subsidies on R&D investment and success : do subsidy history and size matter?

This study provides insights into the effects of public R&D grants on R&D input and output of firms from Germany. Previous research has shown that the allocation of R&D project grants is rather stable regarding the pool of beneficiaries. The question is whether this participation pattern can be justified by its realized effects. In addition, the impact of the grant size on the effects is investigated. Therefore, I allow to a certain extent for heterogeneous treatment effects in these two dimensions. Using a sample of about 8,500 observations, a non-parametric matching approach with multiple treatments is applied to estimate the effects of public R&D grants on firm's R&D input. The results show that particularly frequently given grants as well as medium and large grants are suitable to increase the scope of firm-financed R&D plans. For the analysis of the effects on firm's R&D output the R&D expenditures are disentangled in R&D which would have been spent in the absence of the grant and publicly induced R&D, including the grant and the effect on private R&D expenditures. Basically both types of R&D are equally productive in terms of innovative output. For the statement that a rather stable pattern of program participation leads to a lower effectiveness of the instrument no evidence has been found

Successful Patterns of Scientific Knowledge Sourcing: Mix and Match

Valuable knowledge emerges increasingly outside of firm boundaries, in particular in public research institutions and universities. The question is how firms organize their interactions with universities effectively to acquire knowledge and apply it successfully. Literature has so far largely ignored that firms may combine different types of interactions with universities for optimizing these knowledge sourcing strategies. We argue conceptually that firms need diverse (broad) and highly developed (deep) combinations of various interactions with universities to maximize returns from these linkages. Our empirical investigation rests upon a survey of more than 800 firms in Germany. We find that both the diversity and intensity of interactions with universities propel innovation success. However, broadening the spectrum of interactions is more beneficial with regard to innovation success. In an exploratory step we go beyond breadth and depth of interactions by identifying four distinct patterns of interaction. Our findings show that formal forms of interaction (joint/contract) research provide the best balance between joint knowledge development and value capture. --Technology transfer,industry-science links,open innovation,university knowledge

Detecting Behavioural Additionality: An Empirical Study on the Impact of Public R&D Funding on Firms' Cooperative Behaviour in Germany

Subsidising research networks has become a popular instrument in technology policies, driven mainly by expected positive spillovers. In particular, the stimulation of R&D co-operation between scientific institutions and industry is considered as most promising. In the context of policy evaluation we analyse if public R&D funding is suitable for influencing firms' collaborative behaviour in the intended way and where applicable, if a lasting change results. The empirical analysis is based on German CIS data and a supplemental telephone survey. Using a nearest-neighbour matching approach we find that R&D funding is indeed a particularly valuable tool for the linking of science into industry R&D partnerships. However, we also show in a bivariate probit analysis that newly initiated R&D co-operations with science are less likely to be continued after funding has ended compared to already existing co-operations. Therefore, the behavioural change induced by public funding is not necessarily longlived. --Public Funding,Firm Behaviour,Policy Evaluation,R&D Co-operation

Detecting Behavioural Additionality: An Empirical Study on the Impact of Public R&D Funding on Firms' Cooperative Behaviour in Germany

Subsidising research networks has become a popular instrument in technology policies, driven mainly by expected positive spillovers. In particular, the stimulation of R&D co-operation between scientific institutions and industry is considered as most promising. In the context of policy evaluation we analyse if public R&D funding is suitable for influencing firms' collaborative behaviour in the intended way and where applicable, if a lasting change results. The empirical analysis is based on German CIS data and a supplemental telephone survey. Using a nearest-neighbour matching approach we find that R&D funding is indeed a particularly valuable tool for linking science into industry R&D partnerships. However, we also show in a bivariate probit analysis that newly initiated R&D co-operations with science are less likely to be continued after funding has ended compared to already existing cooperations. Therefore, the behavioural change induced by public funding is not necessarily long-lived. --Public Funding,Firm Behaviour,Policy Evaluation,R&D Co-operation

Empirical Evidence on the Success of R&D Co-operation – Happy together?

In this paper we analyse the effect of R&D co-operation on firms’ innovation performance. We investigate the effect of past co-operation on current sales of innovative products, distinguishing between products new to the firm and new to the market, and on cost reductions due to innovative processes. Particular attention is paid to the impact of different co-operation partners. The analysis rests on firm-level data from two consecutive waves of the annual German innovation survey. We find that innovative firms that cooperate have a higher share of turnover with market novelties and a higher share of cost reduction due to process innovations than non-cooperating firms. In particular, R&D cooperation with research institutes has a positive influence on a firm's economic success with market novelties, while R&D co-operation with competitors leads to an increase in the cost reduction attributable to innovative processes