Small Business Economics

, Volume 45, Issue 3, pp 465–485

R&D policies for young SMEs: input and output effects



This paper evaluates the current focus of EU policy makers on small and medium-sized, young independent firms in high-tech sectors. Therefore, the effect of subsidies on both R&D input and R&D output is compared between independent high-tech young firms (NTBFs), independent low-tech young firms (LTBFs) and their non-independent counterparts. A treatment effects analysis reveals that full crowding-out with regard to public funding is rejected for all firm types. However, the treatment effect is highest for independent high-tech firms. The indirect effect of subsidies on R&D output is evaluated within a patent production framework. These results show that independent high-tech firms have no lower output effects than other firms and thus suggest that the current policy focus on certain firm types is not ineffective.


R&D Subsidies NTBFs Policy evaluation Treatment effects Patents 

JEL Classifications

H25 M13 O31 O38 L26 

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of Managerial Economics, Strategy and Innovation, Faculty of Business and EconomicsKU LeuvenLeuvenBelgium
  2. 2.Center for R&D Monitoring (ECOOM)KU LeuvenLeuvenBelgium
  3. 3.ZEWMannheimGermany

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