Public R&D subsidies and employment growth: Microeconomic evidence from Finnish firms

Abstract

This study empirically explores whether the public financial support for entrepreneurial R&D affects employment growth at the firm level. The data from the Finnish companies suggests that the firms that have received public R&D funding have not generally witnessed any greater employment growth than other companies. However, we find that the public R&D support targeted to the certain types of R&D activities notably contribute to the creation of new jobs: employment in those firms that have received public funding for the R&D projects targeted to the new business areas has clearly grown relatively more than in other companies. The relationship between the firm's total innovation and employment growth is not statistically significant