Governmental Funding and Firms’ Performance – A Panel Data Study

Arvid Raknerud, Statistics Norway

In this paper we study the effects of government financing policies aimed at promoting value creation and innovation. Our analysis includes the tax incentive scheme, SkatteFUNN (SKF), innovation-oriented policy of Innovation Norway (IN) and instruments of the Research Council of Norway (RCN).

IN is a government agency that aims to promote firm growth through innovation programs, regional support and other industrial policies. In our analysis we focus only on IN’s innovation programs. RCN finances research and development (R&D) both in universities and institutes and in private firms. Our analysis comprises only the policy instruments oriented towards the private sector or joint projects between private firms and research institutions. SKF is a general tax incentive scheme provided in the tax legislation.

We compare firms that received support from IN, RCN or SKF during the period 2001-2013 with a control group of firms that did not receive such support. We find positive effects for IN, RCN and SKF on one or several indicators of growth in value creation, sales income or number of employees, and the effects grow as the amount of support increases. We find the most significant effects for the group of projects which receive government support above 1.5 million NOK. We find weak or no effects for support allocations below 500 000 NOK. We also do not find positive effects on return to total assets or productivity for firms receiving support compared with the control group.


About the speaker
Arvid Raknerud is currently a Senior Research Fellow at the Research Department of Statistics Norway, and a Research Associate at the Central Bank of Norway. He has a PhD in Economics from the University of Oslo. His main research fields are computational economics; especially estimation of state space models with a large number of variables, and applied micro- and time series econometrics. He is currently studying topics like the impact of R&D tax credits on firms' innovations, the impact of shareholder taxes on investments in closely held companies, individuals' returns to schooling and continuous-time stochastic volatility models for exchange rate data.

Venue: Conference room (room 0.16 & 0.17)

Date: 06 October 2016

Time: 12:00 - 13:00


UNU-MERIT