This paper evaluates whether public support from innovation from the
central government or the European Union spurs innovation in Austrian
firms. The effect is estimated separately on R&D expenditures and the
output side of innovation, measured by the share of total sales due to
new or substantially modified products. A distinction is also made
between products new to the firm and products new to the market. The
analysis is based on the micro data from the third wave of Community
Innovation Survey, CIS 3, covering the years 1998-2000. The
effectiveness is estimated using a structural model explaining the
determinants of various sources of government support and their effects
on R&D and innovation output.
Receiving central government support increases the intensity of R&D by 2.3 percentage points. EU support is never significant once national support is taken into account. Central government support yields a 2.5 percentage point increase in the share of new to firm innovative sales. When new to market product innovations are considered, central government support leads to a total effect on the share of new to market innovative sales of 3.4 percentage points.
Keywords: government support, innovation surveys, Austria
JEL codes: H22, L52, O31
UNU-MERIT Working Papers ISSN 1871-9872