Government support for firm-level innovation in less innovation-intense regions

Regional innovation intensity is a crucial external factor that influences firm-level innovation outcomes. Firms located in less innovation-intense regions typically under-perform equivalent firms in more innovation-intense regions. Research to-date suggests that the effectiveness of government support for firm-level innovation varies markedly, depending on a firms’ location. However, almost no evidence exists on the effectiveness of government innovation support, in the specific case of firms located in less innovation-intense regions. To fill this gap in the literature, this paper addresses the following research question: What impact does government innovation support have on firm-level innovation in less innovation-intense regions? The analysis draws on the World Bank’s 2010 Business Environment and Enterprise Performance Survey, for five South American countries. Results show that subsidised firms, located in less innovation-intense regions, significantly underperform matched-unsubsidised firms in higher innovation-intensity regions. This result suggests that regional innovation-intensity is a crucial factor in determining the effectiveness of government innovation subsidies.

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Publication Details

Journal
Regional Studies Regional Science
Published
2024-09-30
DOI
https://doi.org/10.1080/21681376.2024.2402484
Citations
3
Primary Topic
Innovation Policy and R&D
Type
article
Field-Weighted Citation Impact
3.39
Controls
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article

Government support for firm-level innovation in less innovation-intense regions

Kevin Mulligan
3 citations
Regional Studies Regional Science
Innovation Policy and R&D
3.39
article

Government support for firm-level innovation in less innovation-intense regions

Kevin Mulligan
article en
3 citations

Abstract

Regional innovation intensity is a crucial external factor that influences firm-level innovation outcomes. Firms located in less innovation-intense regions typically under-perform equivalent firms in more innovation-intense regions. Research to-date suggests that the effectiveness of government support for firm-level innovation varies markedly, depending on a firms’ location. However, almost no evidence exists on the effectiveness of government innovation support, in the specific case of firms located in less innovation-intense regions. To fill this gap in the literature, this paper addresses the following research question: What impact does government innovation support have on firm-level innovation in less innovation-intense regions? The analysis draws on the World Bank’s 2010 Business Environment and Enterprise Performance Survey, for five South American countries. Results show that subsidised firms, located in less innovation-intense regions, significantly underperform matched-unsubsidised firms in higher innovation-intensity regions. This result suggests that regional innovation-intensity is a crucial factor in determining the effectiveness of government innovation subsidies.

Regional Studies Regional ScienceVol. 11(1)
Queen's University Belfast (GB)
Industry, innovation and infrastructure
Openalex Percentile: Top 6%
Innovation Policy and R&D
3.39
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