As times goes by. A dynamic impact assessment of the innovation policy and the Matthew effect on Argentinean firms

ABSTRACT

The objective of this paper is to analyse the impact of public funds for innovation on firm’s capabilities, innovative dynamics and economic performance. A large stream of literature about the evaluation of public funds is focused on testing the existence of additionality effects on investments and results. This paper aims to provide evidence about other dimensions of the firm that public policy can alter, with focus on the time window between the treatment and the impact, and the role of the Matthew effect (recurrence) in this process. The empirical exercise is based on a dynamic panel data made of 1465 firms (3337 observations) that applied to the Argentinean Technological Fund (FONTAR), which is the main public fund for innovation in Argentina, between 2007 and 2016. Results show short-term effects of accessing to FONTAR on firms’ capabilities, medium-term effects on innovation efforts and long-term effects on productivity. Even though the effect on productivity is larger among recurrent firms, the differences among recurrent and non-recurrent firms are not conclusive in case of capabilities and innovation efforts. All in all, this research provides evidence about the ‘when’ of public policy and the need to look beyond input additionality effects when analysing its impact.

KEYWORDS:

• Innovation policy
• Matthew effect
• capabilities
• impact evaluation

Acknowledgements

The authors want to thank the anonymous reviewers, G. Yoguel and Diego Aboal for their comments as well as the exchanges and contributions from CIECTI-BID, Globelics, Lalics, Red PYMES Mercosur and UNSAM-UNGS-UBA seminars.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Florencia Alejandra Fiorentin http://orcid.org/0000-0001-5210-4715

Notes

1 In September 2018, by means of a Presidential decision, the Ministry of Science, Technology and Productive Innovation was converted into a national secretary and moved under the orbit of the Education Ministry.

2 For non-beneficiary firms the survey is answered only when they request for an innovation support.