Do R&D Subsidies Matter? – Evidence for the German Service Sector

Czarnitzki, Dirk ; Fier, Andreas

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URN: urn:nbn:de:bsz:180-madoc-4969
Document Type: Working paper
Year of publication: 2001
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: C24 O31 H32 C20 ,
Subject headings (SWD): Deutschland , Dienstleistungssektor , Innovation , Forschung und Entwicklung
Abstract: In recent times the service sector is often called the driving force of today's economies. This paper analyses the innovative activities of German service firms. We investigate whether firms that receive public subsidies for innovation projects engage more in innovative activities than others. Additionally, we test the hypothesis that innovative firms are more likely to get public grants in the future. Empirically, it turns out that public grants raise the firms' privately financed innovative activities. The more grants a firm has received in the past, the more it invests in current innovation projects. Furthermore, innovating firms are more likely to have future access to public grants. Additionally, the share of university graduates of firms' total employees is an important factor for future participation in public R&D schemes.
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