Input, output, and behavioral additionality of innovation subsidies

Abstract

Using a Conditional Difference in Difference procedure and data for Colombia, we determine if firms that receive subsidies to innovation in the period 2010-2016 present additionality on input, output, and behavioral innovation variables. We found that there are differences among the additionalities of small and medium firms (SMEs) and big firms, and the existence of a crowding-out effect for internal R&D expenditures in SMEs. At the same time, we found additionality on R&D employment for all types of firms and the presence of experience effects introduced by subsidies, especially for SMEs. These effects are related to positive additionalities. At the same time, we cannot find additionality effects on patents and trademarks. However, we found negative additionality on sales of big companies that we relate with the way we measure this variable.