Impact of public R&D financing on employment

Abstract

This study analyses how public R&D financing impacts the labour demand of companies. To our knowledge, no previous studies have distinguished the impact on the firm’s global and domestic employment. Our company-level panel data covers a period from 1997 to 2002. The statistical method employed in the study takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R&D financing increases both group-level and domestic R&D employment. We also analysed the impact of public R&D funding on other than R&D employment. According to our results, public funding does not have an effect on other than R&D employment. However, it is possible that these impacts exist in the longer run