Do selected firms show higher performance? The case of Portugal's innovation subsidy

摘要

The paper evaluates the effect of a Portuguese innovation subsidy (SI Innovation), launched in 2007-2013, on firm performance. Using counterfactual analysis methods and a sample composed of firms with approved applications and non-approved ones, the study shows that firms with the best proposals and with higher performance in the pre-intervention period are more likely to receive the subsidy. A positive and sustainable effect of the subsidy, within a time-window of 5 years, on fixed asset investment and technological progress are found. However, it seems that public support has only an effect on the size of investment and not on the decision to invest. Subsidized firms also perform less well than matched non-subsidized ones, and they are less effective in achieving the planned goals concerning labour productivity and value creation. (C) 2019 Elsevier B.V. All rights reserved.