Additionality effects of public support programmes on cooperation for innovation: evidence from European manufacturing SMEs

We have witnessed an increase in the number of research studies focusing on the behavioural additionality effects of research, development and innovation (RD&I) policy – where this form of additionality measures the impact of public support measures on firms' behaviour thought to promote innovation. This paper considers whether public support increases the propensity of small and medium-sized enterprises (SMEs) in traditional manufacturing industries to cooperate for innovation. Drawing on a unique dataset of SMEs from six manufacturing industries across seven European Union (EU) regions, we estimated treatment effects by applying a range of matching estimators. The results suggest a positive yet heterogeneous impact of public support on cooperation for innovation in the sample SMEs. Overall, the largest treatment parameters refer to public-private partnerships. Following best practice in matching estimation, the study reports its findings from a novel simulation-based sensitivity analysis, which indicates that the estimated treatment parameters are robust with respect to any possible unobserved heterogeneity.