IMF Working Papers Volume 2022 Issue 192: Promoting Innovation: The Differential Impact of R&D Subsidies (2022)

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Promoting Innovation: The Differential Impact of R&D Subsidies

Author:

Reda Cherif

Reda Cherif
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Fuad Hasanov

Fuad Hasanov
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Christoph Grimpe

Christoph Grimpe
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Wolfgang Sofka

Wolfgang Sofka
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Series:: IMF Working Papers

Volume/Issue:: Volume 2022: Issue 192

Publication Date:: 23 Sep 2022

DOI:: https://doi.org/10.5089/9798400217968.001

ISBN:: 9798400217968

ISSN:: 1018-5941

Pages:: 41

Keywords:: Innovation; patents; research and development; R&D; subsidies; multinationals; investment; technology policy; R&D subsidy; high-tech manufacturing; subsidiaries' response; low-tech manufacturing; R&D spending; Transnational corporations; Manufacturing; Services sector; Government subsidies; Investment policy; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2022: Issue 192

Language:: English

Publication Date:: 23 Sep 2022

DOI:: https://doi.org/10.5089/9798400217968.001

ISBN:: 9798400217968

ISSN:: 1018-5941

Pages:: 41

Keywords:: Innovation; patents; research and development; R&D; subsidies; multinationals; investment; technology policy; R&D subsidy; high-tech manufacturing; subsidiaries' response; low-tech manufacturing; R&D spending; Transnational corporations; Manufacturing; Services sector; Government subsidies; Investment policy; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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We investigate the effect of R&D subsidies on firms’ innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms while it does not differ substantially by firm size. Domestic firms have a larger response in R&D spending in low-tech manufacturing, knowledge-intensive services, and technological services while the response of domestic and foreign MNCs is broadly similar and is greater in medium-tech and high-tech manufacturing. Foreign MNC subsidiaries’ response in terms of patents is greater than that of domestic MNCs in most industries.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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