--- title: "Do Public Subsidy Schemes Foster Innovation and Competitiveness in Energy-Intensive Industries?" authors: - name: "Koski, Heli" url: "https://www.etla.fi/henkilot/koski-heli/" sameAs: - "https://twitter.com/heli_koski" - name: "Wang, Maria" url: "https://www.etla.fi/henkilot/wang-maria/" sameAs: - "https://orcid.org/0000-0001-8133-1108" date_published: "2025-01-20" series: "ETLA Working Papers" series_number: "125" issn: - "2323-2420" - "2323-2439" jel_codes: - "D22" - "H23" - "L52" - "O3" - "Q58" language: "en" publisher: "ETLA Economic Research" pdf_url: "https://www.etla.fi/wp-content/uploads/ETLA-Working-Papers-125.pdf" keywords: - "Firm subsidy" - "R&D subsidies" - "EU ETS" - "Competitiveness" - "Green innovation" - "Patents" identifier: "https://www.etla.fi/julkaisut/id/ETLA-Working-Papers-125" abstract: "This study evaluates the impacts of public subsidies on firms in energy-intensive industries, focusing on R&D subsidies and compensation subsidies. Using firm-level data from Finnish energy-intensive industries between 2010 and 2022, it examines how these subsidies influence firm competitiveness and innovation outcomes. Compensation subsidies, designed to alleviate the additional electricity costs imposed by the EU Emissions Trading Scheme (ETS) on firms operating in certain energy-intensive industries, and to enhance their international competitiveness show no significant effects on employment, value added, or labor productivity. R&D subsidies, instead, demonstrate a substantial positive impact on innovation. Specifically, R&D subsidies significantly increase the citation stocks of climate change mitigation technology patents filed with the United States Patent and Trademark Office (USPTO). Total patent citation stocks associated with the European Patent Office (EPO) and USPTO also show statistically significant growth." --- # Do Public Subsidy Schemes Foster Innovation and Competitiveness in Energy-Intensive Industries? **Published:** 2025-01-20 **Categories:** Working Papers **Tags:** ETLA-WEF **URL:** https://www.etla.fi/en/publications/working-papers-en/do-public-subsidy-schemes-foster-innovation-and-competitiveness-in-energy-intensive-industries/ #### Abstract This study evaluates the impacts of public subsidies on firms in energy-intensive industries, focusing on R&D subsidies and compensation subsidies. Using firm-level data from Finnish energy-intensive industries between 2010 and 2022, it examines how these subsidies influence firm competitiveness and innovation outcomes. Compensation subsidies, designed to alleviate the additional electricity costs imposed by the EU Emissions Trading Scheme (ETS) on firms operating in certain energy-intensive industries, and to enhance their international competitiveness show no significant effects on employment, value added, or labor productivity. R&D subsidies, instead, demonstrate a substantial positive impact on innovation. Specifically, R&D subsidies significantly increase the citation stocks of climate change mitigation technology patents filed with the United States Patent and Trademark Office (USPTO). Total patent citation stocks associated with the European Patent Office (EPO) and USPTO also show statistically significant growth. --- ## Additional Information **Kirjoittajat:** Koski, Heli - Wang, Maria **Kansikuva:** https://www.etla.fi/wp-content/uploads/etla-working-papers-125-kansi.jpg **Lataa Pdf:** https://www.etla.fi/wp-content/uploads/ETLA-Working-Papers-125.pdf **Key Words:** Firm subsidy, R&D subsidies, EU ETS, Competitiveness, Green innovation, Patents **Jel:** D22, H23, L52, O3, Q58 **Paivays:** 20.01.2025 **Sivuja:** 32 **Kieli:** en **Sarja:** ETLA Working Papers **Sarja Nro:** 125 **Issn:** 2323-2420, 2323-2439 (Pdf) **Saatavuus:** 2 ## Bibliographic metadata (JSON-LD) ```json { "@context": "https://schema.org", "@type": "ScholarlyArticle", "@id": "https://www.etla.fi/julkaisut/id/ETLA-Working-Papers-125", "headline": "Do Public Subsidy Schemes Foster Innovation and Competitiveness in Energy-Intensive Industries?", "inLanguage": "en", "publisher": { "@type": "Organization", "name": "ETLA Economic Research", "url": "https://www.etla.fi", "logo": { "@type": "ImageObject", "url": "https://www.etla.fi/wp-content/uploads/logo-etla_logo.svg" } }, "datePublished": "2025-01-20T00:00:00+00:00", "author": [ { "@type": "Person", "name": "Koski, Heli", "url": "https://www.etla.fi/henkilot/koski-heli/", "sameAs": [ "https://twitter.com/heli_koski" ] }, { "@type": "Person", "name": "Wang, Maria", "url": "https://www.etla.fi/henkilot/wang-maria/", "sameAs": [ "https://orcid.org/0000-0001-8133-1108" ] } ], "abstract": "This study evaluates the impacts of public subsidies on firms in energy-intensive industries, focusing on R&D subsidies and compensation subsidies. 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