At the Competence-Centre on Microeconomic Evaluation (CC-ME) we advise and support EU policy making through ex-post causal evaluation and data-driven microeconomic analysis. The CC-ME hosts a Microeconometric Seminar Series to promote discussions with external researchers from academia and other institutions. Our Seminar Series is intended to disseminate advanced research methodologies and topics in the field of microeconomic evaluation. To further disseminate the benefits of our Series across the JRC, we post a summary of the presented papers together with the presenters' views and opinions on their research and the future of the field of Applied Economics. |
Last week we had the pleasure of having Professor Enrico Vanino from the University of Sheffield present his work: Catapulting into the Innovation System: Direct and Indirect Effects of Sectoral Public Support for Private Innovation.
Professor Vanino and co-authors point out that the UK Research Councils (UKRCs) spend around £3bn supporting R&D and innovation. The authors provide a comprehensive assessment of these grants on the performance of participating UK firms, using data on all projects funded by UKRCs over the 2004–2016 period and applying a propensity score matching approach. They exploit the richness of the data available in the Gateway to Research database by investigating the heterogeneous effect of these projects across several novel directions which have not been explored before.
Professor Vanino and co-authors find a positive effect on the employment and turnover growth of participating firms, both in the short and in the medium term. Exploring impacts across different types of firms they find stronger performance impacts for firms in R&D intensive industries and for smaller and less productive firms. The researchers also consider how impacts vary depending on the characteristics of the funded research projects in terms of partners’ characteristics, receipt of other research grants and grant value. Finally, the authors focus on the different sources of grants, analysing in particular the evolution in the funding strategy of Innovate UK.
Their results have implications for the extent and targeting of future Research Council funding both in the UK and elsewhere.
To learn more about Professor Vanino’s work and opinions about the future of the field of Applied Economics we asked him to briefly answer a series of questions. You can find his answer to each of our questions below.
Q: What attracted you to research the topics in your paper? A: Different R&D policy tools can play an important role in promoting investment and innovation among firms, including R&D tax credit and research grants. However, there are concerns that these policies could follow a “picking-the-winner” approach, targeting and supporting firms already intensive in R&D activities, and thus widening the gap between leaders and laggards and reinforcing regional inequalities. This is leading to an increased attention on exploring new strategies to stimulate engagement with the innovation system, in particular in small and low-tech businesses, such as innovation hubs. |
Q: Where is the research area where your paper fits moving? A: This study is related to several strands of the literature in urban economics and in the economics of innovation, trying to unpack the black-box of knowledge spillovers to precisely identify the sources of these externalities and the different mechanisms at play, in particular when analysing spillovers originating from public R&D investment. |
Q: What, in your opinion, will the next breakthrough in Applied Economics be? A: The application of artificial intelligence and machine learning techniques not just to data analysis, but also to causal inference. |
The CC-ME team would like to congratulate Professor Vanino for his insightful research and thank him for presenting it in our Seminar Series.
For more information on the upcoming presentations and how to participate in our Seminar Series please visit our dedicated website.
| Originally Published | Last Updated | 13 Sep 2023 | 11 Mar 2024 |
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