“Financing Innovation: Evidence from R&D Grants” (2017), by Sabrina T Howell. Economics research paper. Original abstract below, unchanged. No free PDF was found.

Financing Innovation: Evidence from R&D Grants

Sabrina T Howell · March 30, 2017 · Economics

Abstract

Governments regularly subsidize new ventures to spur innovation. This paper conducts the first large-sample, quasi-experimental evaluation of R&D subsidies. I use data on ranked applicants to the US Department of Energy's SBIR grant program. An early-stage award approximately doubles the probability that a firm receives subsequent venture capital and has large, positive impacts on patenting and revenue. These effects are stronger for more financially constrained firms. Certification, where the award contains information about firm quality, likely does not explain the grant effect. Instead, the grants are useful because they fund technology prototyping.(JEL D22, G24, G32, L53, O31, O34, O38)

Source page DOI: 10.1257/aer.20150808