Innovation is often seen as a critical driver of economic growth. This paper
evaluates the impact of the Portuguese tax incentive to R&D (SIFIDE) on R&D
investment (creation of innovation) and on firms’ survival (maintenance of innovation),
using PSM and Difference-in-Differences methods. Results show positive effects of the
program on both R&D investment and firms’ survival, especially for the services sector
(R&D) and for small firms (survival). In addition, the hypotheses of full crowding-out
and no additionality on private R&D were rejected, implying that the incentive does
not merely replace private with public funding
