KU Leuven Managerial economics, strategy and innovation

A significant amount of money is spent on programs to stimulate innovative activities. In this analysis, we review the effects of a specific government-sponsored commercial R&D program from various angles. We start by evaluating whether we find positive effects of subsidies on R&D investment and (R&D) employment. Then, we analyze how the observed effects of subsidies on R&D intensity and employment vary over time, vary depending on how many supported projects a single firm has at the same time or vary if a same firm gets support consecutively. Finally, we estimate the macroeconomic impact these grants have on the local economy in terms of (R&D) employment. We conclude that the policies do not create crowding out effects or weaker effects over time, by project or for?consecutive clients? and find that, on average, five jobs are created per supported project. Jelcodes:H20,O30 Value for money? New microeconometric evidence on the input additionality of R&D grants in Flander