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R&D policy instrument mix sequencing: evaluating the impact of receiving R&D grants and R&D tax credits over time on firm-level R&D
Date
2024
Abstract
The R&D policy instrument mix concept has become increasingly important for understanding how public R&D support drives firm-level R&D. To-date, empirical studies have conceptualised the R&D policy instrument mix as a static unit, whereby firms receive different R&D policy instruments at one point in time. However, firms can also receive different instruments in a sequence, over time. While potential sequencing effects are well rehearsed theoretically, this issue remains a major gap in the empirical literature. Our study evaluates, for the first time, how R&D policy instrument mix sequencing impacts firm-level R&D. We construct a unique dataset, comprising 8,556 unique firms, and 36,136 firm-year observations, over a 17-year period for Ireland. Our analysis focuses on two different R&D policy instruments (R&D grants and R&D tax credits) pursuing the same policy objective. We develop a novel approach to measure R&D policy instrument mix sequencing, focusing on the R&D policy instruments firms receive over a four-year time window. We implement this approach using a multi-treatment panel-data matching approach, which addresses issues of selection bias. Our results suggest that R&D policy instrument mix sequencing is highly effective at driving firm-level R&D, and that some sequences are more effective than others. These findings highlight opportunities to realise superior policy outcomes through targeted sequencing.
Supervisor
Description
Publisher
Taylor and Francis
Citation
Industry and Innovation, 2024
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Lenihan_2024_R_D.pdf
Adobe PDF, 2.26 MB
Funding code
Funding Information
Sustainable Development Goals
External Link
Type
Article
Rights
https://creativecommons.org/licenses/by-nc-sa/4.0/