International comparison of the R&D subsidy allocation process: evidence from five European Union countries

In this paper, we update and summarize the results of the SIMPATIC e-book on the results from microeconometric analysis of how firms apply for R&D subsidies, and how governments grant them, using data from 5 EU countries. We find that older firms are less and larger firms mostly more likely to apply for subsidies; that labor productivity has a heterogenous effect, and that SMEs are more likely to apply in Finland and Germany and less likely to apply in the Netherlands. Firms in disadvantaged regions in Finland and Germany. Firm characteristics are mostly uncorrelated with the subsidy rate. We find a great deal of heterogeneity across countries. Firms in all other countries are more likely to apply given their characteristics than German firms despite the fact that they get smaller subsidy rates than German firms with same characteristics.