Are Firms That Received R&D Subsidies More Innovative?

This paper looks at the effectiveness of R&D grants for Canadian plants that already benefit from R&D tax credits. Using a non-parametric matching estimator, we find that firms that benefited from both policy measures introduced more new products than their counterparts that only benefited from R&D tax incentives. They also made more world-first product innovations and were more successful in commercializing their innovations.

Keywords: Innovations, R&D, Matching estimators, Mahalanobis, Innovation survey, Tax credits, Grants.

UNU-MERIT Working Papers ISSN 1871-9872