Animate the cluster or subsidize collaborative R&D? A multiple overlapping treatments approach to assess the impacts of the French cluster policy

Abstract

AbstractThis article examines the effectiveness of the French cluster policy on R&D and innovation in terms of the economic performance of participating SMEs. Based on an original dataset, we built different measures of treatment and extended the DiD methodology to a multiple overlapping treatments approach. Joining a cluster’s association allows firms to benefit from low-cost animation actions and common services, while participating in R&D projects offers substantial financial support. Our findings indicate a complementarity between the two types of instruments since the policy is most effective when the two treatments are simultaneously used. Interestingly, they also show that belonging to a cluster alone induces much stronger positive impacts on R&D spending and on both the R&D and total employment of SMEs than participating in R&D collaborative projects alone. Therefore, to achieve its impact on SMEs, the cluster policy should not overlook low-cost instruments such as animation actions and common services, both as a standalone instrument and as an effective complement to subsidy policies for collaborative R&D projects.