Using regression analysis, we estimate the effects of financial support from the RCN on R&D intensity (i.e., research and development total expenditures per employee), number of employees, turnover and productivity.
Recipients of grants from RCN are not representative for the entire population of Norwegian enterprises. This applies to both size, industry and R&D intensity. To narrow the analysis to comparable enterprises, we restrict the analysis to enterprises that have applied for funding from the RCN, and which have received similar project assessments, but where some project applications have been awarded funding and others have not.
Using RCN's allocation practice we identify enterprises with project applications with equally high overall grades, but where some applications have been approved for funding and others have been rejected. We then look at development in R&D total expenditures, the number of employees, turnover and productivity in enterprises that have received support (treated group) relative to enterprises that have not received support in the same allocation year (control group). Where possible, we compare the results for newly established and established enterprises.
Our main findings are that enterprises with approved applications in a given allocation year (and who have not received any other grants from RCN in the year before or after this allocation year) have higher growth in subsequent years both in R&D intensity, turnover and the number of employees compared to the enterprises in the control group. The estimated effects in the regression analyses tend to be stronger for the small firms and newly established firms.
We find no significant differences in the productivity development except for the significant growth in the group of the newly established firms.
Concerning the group of enterprises that have applied for or received funding for two consecutive years, these stand out as larger and more R&D intensive than other enterprises. To the extent that more growth can be observed here than in the control group of enterprises that were not supported neither in the allocation year, the year before or the year after, it is likely due do the characteristics of the enterprise rather than the fact that they received support in the same allocation year as the control group. For example, for this group of firms we cannot exclude self-selection.