Evaluation of Indirect Effects of Place-Based Science-Industry Transfer Policies : Case of French Technological Research Institutes

When it comes to evaluating the causal effect of public policies on corporate performance, most studies tend to exclusively focus on targeted (treated) firms as if they have no relationship to the rest of the economy. Yet, public policies are highly likely to indirectly influence non-targeted firms due to the relationships they have with the targeted firms. This paper aims to fill this gap by evaluating the indirect causal effect of a new French science-industry transfer policy on the financial and employment variables of non-targeted companies. To do so, it focuses on French Technological Research Institutes (TRIs) which are science-industry collaborations based on technological platforms that bring together SMEs, large companies, universities and public research bodies with the goal of accelerating the transfer of knowledge towards firms and generating spillovers inside and outside the scheme. Based on geographical economics literature, it can be assumed that indirect effects tend to be spatially concentrated. By comparing a local untreated company to a non-local untreated company, therefore, using a difference-in-differences method applied to panel data (2008-2016) and combined with a double matching at the department level (NUTS 3) and at the firm level, it can be seen that non-beneficiary companies, located in the treated French department significantly improve their financial performance (turnover, financial autonomy) compared to control companies located in the control departments. The dynamics of employment variables are a little more complex. A negative significant effect is observed on the proportion of managers at the beginning of treatment and a positive significant effect is noticed later at the end of the period of observation. Analysis of the dynamics of the effects indicates that performance does not improve immediately after the treatment but later in time