Innovation outcomes of public R&D support: A new approach to identifying output additionality
Working paper

View/ Open
Date
2025-01Metadata
Show full item recordCollections
- Discussion Papers [1011]
Abstract
What difference does government support of business R&D make to the rate of innovation?
Addressing this important question has deep theoretical roots and broadening practical applications
in OECD countries. The analysis of output additionality has been hampered by incomplete data
combined with adaption of problematic methodologies. In this light, we contribute to the formative
literature in three main ways: we analyze comprehensive panel data of Norwegian enterprises over
a 20-year period; we include trademarks and industrial designs as well as patents to broaden
measures of innovation output; and we apply machine learning methods to estimate treatment
effect functions, thereby addressing the problem of a practically unlimited number of potential
confounding factors. Our findings support and elaborate earlier work that fiscal stimulus tends to
have greatest impact on previously non-innovative firms. The impact of support measures, alone or
in combination, is on the extensive rather than intensive margin. For previously R&D-active firms,
our results indicate that public support has low additionality and even risks crowding-out private
financing of R&D.