R&D subsidies and productivity in SMEs
Abstract
This paper examines the effect of R&D subsidies on labour productivity. We use firm-level data on Finnish SMEs from 2000 to 2012 and apply a combined matching and difference-in-differences method to control for selection bias. We find no significant positive effect on labour productivity over the five-year period after a subsidy is granted. However, the results vary over time and indicate a 2–4 % negative effect on SMEs’ annual productivity growth one to 2 years after the subsidy year. Nevertheless, subsidies generate a positive employment effect and enhance firm survival. Additional scrutiny reveals that subsidies positively affect the human capital level of low-skill firms.
Main Authors
Format
Articles
Research article
Published
2015
Series
Subjects
Publication in research information system
Publisher
Springer US
The permanent address of the publication
https://urn.fi/URN:NBN:fi:jyu-201601251273Käytä tätä linkitykseen.
Review status
Peer reviewed
ISSN
0921-898X
DOI
https://doi.org/10.1007/s11187-015-9658-9
Language
English
Published in
Small Business Economics
Citation
- Karhunen, H., & Huovari, J. (2015). R&D subsidies and productivity in SMEs. Small Business Economics, 45(4), 805-823. https://doi.org/10.1007/s11187-015-9658-9
License
Copyright© Springer Science+Business Media New York 2015. This is a final draft version of an article whose final and definitive form has been published by Springer. Published in this repository with the kind permission of the publisher.