Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/65758
Year of Publication: 
2012
Series/Report no.: 
Cardiff Economics Working Papers No. E2012/4
Publisher: 
Cardiff University, Cardiff Business School, Cardiff
Abstract: 
This paper assesses UK innovation policy impact on a large, population weighted, sample of both service and manufacturing SMEs. By focussing on self-reported innovation the study achieves a wider coverage of the effects of SME innovation policy than possible with more traditional indicators. Propensity score matching indicates that SMEs receiving UK state support for innovation were more likely to innovate than unsupported comparable enterprises. Innovating enterprises are shown to have grown significantly faster over the years 2002-4 when other growth influences are appropriately controlled. Combining these two results and comparing the outlays on SME innovation policy with the estimated effects suggests that policy was efficient as well as effective. There is evidence that SME tax credits were expensive compared with earlier support instruments. But the overall high returns estimated suggest that, even in times of public spending cuts, persisting with SME innovation policy would be prudent.
Subjects: 
Innovation
State Aid
SME
Policy Evaluation
JEL: 
L25
R38
Document Type: 
Working Paper

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