TY - UNPB

T1 - The Contribution of Different Public Innovation Funding Programmes to SMEs’ Export Performance

AU - Liu, Rebecca Ru-Yuh

AU - Rammer, Christian

PY - 2016/11

Y1 - 2016/11

N2 - This paper studies the effects of different public innovation funding programs on theinnovation output and export performance of small and medium-sized enterprises (SMEs).We evaluate the effectiveness of regional, national and European funding programsimplemented in Germany for both product and process innovations. Our panel study showsthat public financial support contributes to higher innovation outputs, which in turn translatesinto higher export success in later years. This relation however only holds for certain sourcesof public funding and certain types of innovation output. Innovation support from theEuropean Union and national programs for cutting-edge technology that results in highersales with new-to-market products shows a significant positive effect on SMEs’ exportperformance. For funding programs run by regional authorities, we find similar thoughrelatively smaller impacts on both innovation output and exporting. Bottom-up funding at thenational level—which allows firms to freely define the design of the funded innovationprojects in terms of content and cooperation—increases sales with innovations that are onlynew to the firm, but these innovations have limited impacts on export success. Our resultssuggest that public innovation programs should challenge SMEs to go for more ambitiousinnovations in order to strengthen their competitiveness

AB - This paper studies the effects of different public innovation funding programs on theinnovation output and export performance of small and medium-sized enterprises (SMEs).We evaluate the effectiveness of regional, national and European funding programsimplemented in Germany for both product and process innovations. Our panel study showsthat public financial support contributes to higher innovation outputs, which in turn translatesinto higher export success in later years. This relation however only holds for certain sourcesof public funding and certain types of innovation output. Innovation support from theEuropean Union and national programs for cutting-edge technology that results in highersales with new-to-market products shows a significant positive effect on SMEs’ exportperformance. For funding programs run by regional authorities, we find similar thoughrelatively smaller impacts on both innovation output and exporting. Bottom-up funding at thenational level—which allows firms to freely define the design of the funded innovationprojects in terms of content and cooperation—increases sales with innovations that are onlynew to the firm, but these innovations have limited impacts on export success. Our resultssuggest that public innovation programs should challenge SMEs to go for more ambitiousinnovations in order to strengthen their competitiveness

KW - Public Funding

KW - SMEs

KW - Innovation Outputs

KW - Exporting

KW - Panel Study

KW - Matching

M3 - Discussion paper

BT - The Contribution of Different Public Innovation Funding Programmes to SMEs’ Export Performance

PB - Centre for European Economic Research

CY - Mannheim

ER -