Access to Government Support for Innovation — Empirical Evidence From the Ruhr Area in Germany

Abstract

Governments all over the world support innovation activities in private companies with several different programs. Typical measures are R&D subsidies, consulting services, incubator facilities, opportunities for networking, and subsidized loans. From an economic perspective, public support for innovations may help to compensate for market failure. But government support encounters the risk of being neither effective nor efficient. Furthermore, the ability of a company to successfully apply for public innovation support programs depends on the amount of administrative resources it already is equipped with, i.e. its size and its existing relationships with research institutions. In this paper, we look at public support for private companies in one specific German region, the Ruhr area. We use a sample of 74 companies, all of which engage in R&D activities and have already filed patents. Our findings show that firms need a minimum company size to be able to successfully apply for public innovation support. Furthermore, we show that an existing cooperation with research institutions makes access to public support measures easier. We also find that public innovation support indeed improves the patent position of companies.