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The Effect of Innovation Policy on Firm Innovation and Firm Eco-Innovation: A Review of Recent Research

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Abstract

This entry first provides a review of the recent empirical evidence on the effect of public subsidies on firm innovation. The entry then provides a review of the impact of public subsidies on Eco-Innovation. One of the four Grand Challenges set out by the UK government’s Industrial Strategy in 2017 – Clean Growth – builds upon the concept of green growth, which has taken center stage in policy debates about sustainable economic development. Eco-Innovation has been presented as a key driver of green growth. While some heterogeneities in research results remain, the recent evidence confirms that public R&D and innovation policy support can play a role in increasing firms’ general R&D and innovation, and their Eco-Innovation.

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Notes

  1. 1.

    For two recent analyses of the relative effectiveness of R&D tax credits and R&D subsidies, see Dimos et al. (2022) and Tang et al. (2022). Petrin and Radicic (2023) provide a recent study of potential complementary interaction between these two policy instruments with respect to product and process innovations. For a review of the literature on R&D policy instruments, see Martin (2016).

  2. 2.

    Sections “Innovation Policy: Economic Rationale and Impact Mechanisms” and “The Empirical Evidence on the Effect of Innovation Policy on Firms’ Innovation” of this review are based upon and update Becker (2019).

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  1. Durham University Business School, Durham University, Durham, UK

    Bettina Becker

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  1. Durham University Business School, Durham University, Durham, United Kingdom

    Bettina Becker

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Becker, B. (2023). The Effect of Innovation Policy on Firm Innovation and Firm Eco-Innovation: A Review of Recent Research. In: The Palgrave Encyclopedia of Entrepreneurship. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-68128-9_10-1

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  • DOI: https://doi.org/10.1007/978-3-030-68128-9_10-1

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