Evaluation of Tekes R&D Funding for the European Commission


This report presents an assessment of the impacts of Tekes R&D funding on firm performance for the European Commission. The study assessed the direct and indirect effects of Tekes R&D funding on companies that had Tekes-funded projects that ended in 2010–2014. We found clear input additionality with respect to R&D job creation and R&D intensity. Our estimations suggest that R&D subsidies increase a firm’s R&D intensity for up to eight years and R&D job creation for up to six years after the firm’s receipt of an R&D subsidy. The estimation results do not provide any support for output additionality in terms of labor productivity. We did not find any positive spillovers via employee flows from subsidized companies to non-subsidized companies. Our empirical findings suggest that R&D subsidies may hinder the structural change and market exit of old, less productive firms and may thus have adverse effects on competition. The impact of R&D subsidies on the firms’ market exit was similar among young companies under six years of age.

Evaluation of Tekes R&D Funding for the European Commission – Impact Study, Report 3/2020.

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R&D subsidies, Input additionality, Output additionality, Competition