TY - JOUR
T1 - More subsidies, more innovation? Evaluating whether a mix of subsidies from regional, national and EU sources crowds out firm-level innovation
AU - Mulligan, Kevin
AU - Lenihan, Helena
AU - Doran, Justin
N1 - Publisher Copyright:
© 2019, © 2019 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
PY - 2019/1/1
Y1 - 2019/1/1
N2 - Policy-makers at regional, national and European Union (EU) levels of governance use a variety of subsidy programmes to stimulate firm-level innovation. Against this backdrop, this paper investigates three important issues that have not received sufficient attention in the literature: (1) whether evaluating the impact of subsidies from each individual source is biased by ignoring firms that receive a mix of subsidies from different sources at the same point in time; (2) whether receiving a mix of subsidies from regional, national and EU sources crowds out firm-level innovation; and (3) if effective, whether subsidy mix stimulates forms of innovation with higher private or social returns. The findings demonstrate that ignoring subsidy mix significantly biases evaluations of subsidies from individual sources. Moreover, subsidy mix can be a highly effective means of stimulating forms of firm-level innovation with the highest social returns, precisely where market and systemic failures are most acute.
AB - Policy-makers at regional, national and European Union (EU) levels of governance use a variety of subsidy programmes to stimulate firm-level innovation. Against this backdrop, this paper investigates three important issues that have not received sufficient attention in the literature: (1) whether evaluating the impact of subsidies from each individual source is biased by ignoring firms that receive a mix of subsidies from different sources at the same point in time; (2) whether receiving a mix of subsidies from regional, national and EU sources crowds out firm-level innovation; and (3) if effective, whether subsidy mix stimulates forms of innovation with higher private or social returns. The findings demonstrate that ignoring subsidy mix significantly biases evaluations of subsidies from individual sources. Moreover, subsidy mix can be a highly effective means of stimulating forms of firm-level innovation with the highest social returns, precisely where market and systemic failures are most acute.
KW - firm-level innovation
KW - policy evaluation
KW - policy mix
KW - subsidies
UR - http://www.scopus.com/inward/record.url?scp=85065862920&partnerID=8YFLogxK
U2 - 10.1080/21681376.2019.1580608
DO - 10.1080/21681376.2019.1580608
M3 - Article
AN - SCOPUS:85065862920
SN - 2168-1376
VL - 6
SP - 130
EP - 138
JO - Regional Studies, Regional Science
JF - Regional Studies, Regional Science
IS - 1
ER -