Does government support for private innovation matter? Firm-level evidence from two catching-up countries

Szczygielski K., Grabowski W., PAMUKCU M. T. , Tandogan V. S.

RESEARCH POLICY, vol.46, no.1, pp.219-237, 2017 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Volume: 46 Issue: 1
  • Publication Date: 2017
  • Doi Number: 10.1016/j.respol.2016.10.009
  • Journal Name: RESEARCH POLICY
  • Journal Indexes: Social Sciences Citation Index, Scopus
  • Page Numbers: pp.219-237
  • Keywords: Innovation, Manufacturing firms, Government support, Output additionality, EU Funds, Catching-up process, Technology followers, RESEARCH-AND-DEVELOPMENT, DEVELOPMENT SUBSIDIES, DEVELOPMENT GRANTS, SECTORAL PATTERNS, TECHNOLOGY POLICY, TRANSITION, SCHEMES, ADDITIONALITY, PRODUCTIVITY, ENTERPRISES


Turkey and Poland are two technology-follower countries that represent a similar level of economic development. In recent years the governments in both countries sought to improve the innovation performance of companies by increasingly offering grants for innovation activities. We analyze the institutional frameworks in which these policies were formulated and implemented, and we assess their efficiency by looking at data from the 2010 innovation surveys. We find that government aid for R&D activities contributed to better innovation performance by firms in both countries. By contrast, EU-funded grants for physical and human capital upgrading in Poland were inefficient in fostering innovation; in fact they may have actually impeded it. Policy conclusions for what we call "technology-follower countries with relatively well-developed institutions" are suggested. (C) 2016 Elsevier B.V. All rights reserved.