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ABSTRACT
Many studies have looked at the effectiveness of public schemes supporting private R&D but few have highlighted the role regions play in R&D funding. The present article investigates the effectiveness of R&D support at this level of analysis. More precisely, it assesses the R&D support scheme developed in Aquitaine, France's number one region in terms of proportion of budget spent on innovation. Its findings show that (i) public subsidies (regional and non-regional subsidies) have induced local SMEs to increase their R&D resources; (ii) effectiveness of public R&D support relies on the joint interventions of regional, national and supranational authorities; (iii) higher private R&D tends to be explained by an increase in the number of R&D employees, rather than an increase in their remuneration; (iv) regional action has a beneficial effect on business growth, and (v) job creation targets of the regional science and technology policy are satisfied, suggesting that regional subsidies are particularly effective when they help the region's innovative SMEs to expand and develop. More broadly, the article enhances understanding of the determinants explaining the effectiveness of public actions supporting private R&D.
Acknowledgments
The work was supported by IdEx Bordeaux. For provision of data and permission to use it here, we acknowledge the Aquitaine Regional Council. We also thank all the people who allowed us to interview them and the head of the Aquitaine Regional Council archives for their assistance. We thank the editor and anonymous referees. For helpful comments and suggestions, we are indebted to Christophe Carrincazeaux, Elodie Carpentier, Raphaël Chiappini, Maris Coris, David Doloreux, Viola Lamani, and Suneha Seetahul.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Aid allocation practices might differ from the region's rules, meaning that in reality, the allocation process is no longer selective but becomes quasi-automatic.
2 To date, we believe that there are only four empirical studies (Antonioli et al., Citation2014; Bronzini & Iachini, Citation2014; Bronzini & Piselli, Citation2016; Dumont, Citation2013) dealing with the sole regional R&D subsidies.
3 This study only refers here to more recent studies, given how much total research there has been on the effectiveness of public R&D interventions. For a broader literature review, see Zúñiga-Vicente et al. (Citation2014).
4 In France, the favourable tax treatment of companies engaged in R&D projects (such as CIR research tax credits or the JEI tax regime for innovative young companies) is done automatically. On the other hand, companies receiving public subsidies for private R&D undergo a selection process.
5 Being the characteristics of companies chosen through a picking the winner strategy. See Cantner and Kösters (Citation2012).
6 This has notably been the case with Community Innovation Surveys (CIS).
7 In addition, there is a broad consensus that innovation is a key factor for the regional development (see Albert, Citation2017; Vaz, de Noronha Vaz, Galindo, & Nijkamp, Citation2014).
8 Since the mid-1990s, ‘regions have been associated with national research and technology policies and their implementation’ (1996 law, General Local Authorities Code).
9 Interview with Deputy Managing Director, Economic Development and Employment Branch, 9 November 2012.
10 Management of Industrial Development Intervention Regulations, Aquitaine Regional Council.
11 It is also an indirect way of accounting for the financial health criterion since the companies that received subsidies can only be matched with surviving non-beneficiary companies.