The Role of Firm RD Effort and Collaboration as Mediating Drivers of Innovation Policy Effectiveness

This paper investigates the impact of firm RD policies sustaining RD investment and collaboration on company innovation performance. Individual and cooperative RD investments are considered as intermediate outcomes (inputù and behavioralù additionality, respectively) contributing to the final outcome (presence of product innovation). We use a treatment random coefficient model to estimate the policy additionality on a panel dataset merging the third and the fourth wave of the Italian Community Innovation Survey (CIS). Results show a significant and positive policy impact on company propensity to product innovation only for the input additionality and for the interaction between the input and the cooperative additionality. This occurs when company cooperation scores overcome a certain threshold, in accordance with the theory which states that cooperation outcomes tend to increase when higher spillovers are .pursued by the firms.