ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 980
This study analyses how public R&D financing impacts the labour demand of companies. To our knowledge, no previous studies have distinguished the impact on the firm’s global and domestic employment. Our company-level panel data covers a period from 1997 to 2002. The statistical method employed in the study takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R&D financing increases both group-level and domestic R&D employment. We also analysed the impact of public R&D funding on other than R&D employment. According to our results, public funding does not have an effect on other than R&D employment. However, it is possible that these impacts exist in the longer run.
Public finance, R&D, employment, research and development, substitute, endogeneity