Labor demand effect of public R&D funding

Bernd Ebersberger

Research output: Book/ReportReport

Abstract

This paper analyzes the employment effects of publicly subsidized R&D. The basic, very stylized line of reasoning underlying this question is that public subsidies for R&D foster innovation; innovation, in turn, causes firm growth, which, in turn, also increases the firms' labor demand. The nexus of publicly subsidized R&D and the labor demand effect is usually treated in two distinct steps. The first step studies the direct output of the research activity and asks whether publicly subsidized R&D programs increase the companies' rate of innovation. The second step derives how the outcomes of the research activity (innovations, patents, etc.) influence the firms' labor demand. In this research we merge both steps. We directly analyze whether companies that received public subsidies show a differential labor demand subsequent to being subsidized. We test the hypothesis using data on a panel of Finnish firms consisting of subsidized as well as of not subsidized firms. To eliminate the selection bias and to estimate the impact of the subsidies we use a kernel-based matching and a diffs-in-diffs estimation. The results of this study support the hypothesis that public subsidies have a positive impact on companies' innovative output. They also establish an empirical link between the funding and the companies' subsequent labor demand. Public subsidies for innovation are found to have a positive influence on the companies' employment.
Original languageEnglish
Place of PublicationEspoo
PublisherVTT Technical Research Centre of Finland
Number of pages27
ISBN (Electronic)951-38-6561-4
Publication statusPublished - 2004
MoE publication typeNot Eligible

Publication series

SeriesVTT Working Papers
Number9

Fingerprint

Labour demand
Funding
Innovation
Public subsidies
Research activities
Finnish firms
Employment effects
Patents
Kernel
Firm growth
Subsidies
Selection bias

Keywords

  • R&D subsidies
  • labor demand
  • evaluation
  • treatment effect
  • conditional difference in difference

Cite this

Ebersberger, B. (2004). Labor demand effect of public R&D funding. Espoo: VTT Technical Research Centre of Finland. VTT Working Papers, No. 9
Ebersberger, Bernd. / Labor demand effect of public R&D funding. Espoo : VTT Technical Research Centre of Finland, 2004. 27 p. (VTT Working Papers; No. 9).
@book{d3d26a55ef454d56b7ae4c9d53bb19eb,
title = "Labor demand effect of public R&D funding",
abstract = "This paper analyzes the employment effects of publicly subsidized R&D. The basic, very stylized line of reasoning underlying this question is that public subsidies for R&D foster innovation; innovation, in turn, causes firm growth, which, in turn, also increases the firms' labor demand. The nexus of publicly subsidized R&D and the labor demand effect is usually treated in two distinct steps. The first step studies the direct output of the research activity and asks whether publicly subsidized R&D programs increase the companies' rate of innovation. The second step derives how the outcomes of the research activity (innovations, patents, etc.) influence the firms' labor demand. In this research we merge both steps. We directly analyze whether companies that received public subsidies show a differential labor demand subsequent to being subsidized. We test the hypothesis using data on a panel of Finnish firms consisting of subsidized as well as of not subsidized firms. To eliminate the selection bias and to estimate the impact of the subsidies we use a kernel-based matching and a diffs-in-diffs estimation. The results of this study support the hypothesis that public subsidies have a positive impact on companies' innovative output. They also establish an empirical link between the funding and the companies' subsequent labor demand. Public subsidies for innovation are found to have a positive influence on the companies' employment.",
keywords = "R&D subsidies, labor demand, evaluation, treatment effect, conditional difference in difference",
author = "Bernd Ebersberger",
note = "Project code: P2SU00143",
year = "2004",
language = "English",
series = "VTT Working Papers",
publisher = "VTT Technical Research Centre of Finland",
number = "9",
address = "Finland",

}

Ebersberger, B 2004, Labor demand effect of public R&D funding. VTT Working Papers, no. 9, VTT Technical Research Centre of Finland, Espoo.

Labor demand effect of public R&D funding. / Ebersberger, Bernd.

Espoo : VTT Technical Research Centre of Finland, 2004. 27 p. (VTT Working Papers; No. 9).

Research output: Book/ReportReport

TY - BOOK

T1 - Labor demand effect of public R&D funding

AU - Ebersberger, Bernd

N1 - Project code: P2SU00143

PY - 2004

Y1 - 2004

N2 - This paper analyzes the employment effects of publicly subsidized R&D. The basic, very stylized line of reasoning underlying this question is that public subsidies for R&D foster innovation; innovation, in turn, causes firm growth, which, in turn, also increases the firms' labor demand. The nexus of publicly subsidized R&D and the labor demand effect is usually treated in two distinct steps. The first step studies the direct output of the research activity and asks whether publicly subsidized R&D programs increase the companies' rate of innovation. The second step derives how the outcomes of the research activity (innovations, patents, etc.) influence the firms' labor demand. In this research we merge both steps. We directly analyze whether companies that received public subsidies show a differential labor demand subsequent to being subsidized. We test the hypothesis using data on a panel of Finnish firms consisting of subsidized as well as of not subsidized firms. To eliminate the selection bias and to estimate the impact of the subsidies we use a kernel-based matching and a diffs-in-diffs estimation. The results of this study support the hypothesis that public subsidies have a positive impact on companies' innovative output. They also establish an empirical link between the funding and the companies' subsequent labor demand. Public subsidies for innovation are found to have a positive influence on the companies' employment.

AB - This paper analyzes the employment effects of publicly subsidized R&D. The basic, very stylized line of reasoning underlying this question is that public subsidies for R&D foster innovation; innovation, in turn, causes firm growth, which, in turn, also increases the firms' labor demand. The nexus of publicly subsidized R&D and the labor demand effect is usually treated in two distinct steps. The first step studies the direct output of the research activity and asks whether publicly subsidized R&D programs increase the companies' rate of innovation. The second step derives how the outcomes of the research activity (innovations, patents, etc.) influence the firms' labor demand. In this research we merge both steps. We directly analyze whether companies that received public subsidies show a differential labor demand subsequent to being subsidized. We test the hypothesis using data on a panel of Finnish firms consisting of subsidized as well as of not subsidized firms. To eliminate the selection bias and to estimate the impact of the subsidies we use a kernel-based matching and a diffs-in-diffs estimation. The results of this study support the hypothesis that public subsidies have a positive impact on companies' innovative output. They also establish an empirical link between the funding and the companies' subsequent labor demand. Public subsidies for innovation are found to have a positive influence on the companies' employment.

KW - R&D subsidies

KW - labor demand

KW - evaluation

KW - treatment effect

KW - conditional difference in difference

M3 - Report

T3 - VTT Working Papers

BT - Labor demand effect of public R&D funding

PB - VTT Technical Research Centre of Finland

CY - Espoo

ER -

Ebersberger B. Labor demand effect of public R&D funding. Espoo: VTT Technical Research Centre of Finland, 2004. 27 p. (VTT Working Papers; No. 9).