Table 5.
The link between policy-induced R&D and firm performance, in foreign-owned subsidiaries and domestic firms
| Variable | Foreign-owned subsidiaries | Domestic firms | ||||
|---|---|---|---|---|---|---|
| Turnover (log) | GVA (log) | Exports (log) | Turnover (log) | GVA (log) | Exports (log) | |
| Privately-funded R&D | 0.00806** (0.00322) | 0.00751*** (0.00259) | 0.00734** (0.00335) | 0.152*** (0.0349) | 0.129*** (0.0346) | 0.159*** (0.0388) |
| Policy-induced: R&D tax credit | 0.00668** (0.00315) | 0.00599** (0.00323) | 0.00607* (0.00322) | 0.159*** (0.0306) | 0.136*** (0.0312) | 0.132*** (0.0361) |
| Policy-induced: R&D grant | 0.00775** (0.00337) | 0.00618** (0.00293) | 0.00703** (0.00352) | 0.146*** (0.0355) | 0.119*** (0.0352) | 0.172*** (0.0397) |
| Firm size: small | 0.113 (0.188) | − 0.0186 (0.170) | 0.145 (0.190) | 0.381*** (0.0256) | 0.412*** (0.0297) | 0.346*** (0.0439) |
| Firm size: medium | 0.564*** (0.199) | 0.343* (0.185) | 0.500** (0.199) | 0.751*** (0.0360) | 0.775*** (0.0426) | 0.663*** (0.0640) |
| Firm size: large | 0.937*** (0.208) | 0.671*** (0.199) | 0.878*** (0.217) | 1.128*** (0.0752) | 1.184*** (0.0889) | 0.893*** (0.143) |
| Materials | 0.198 (0.169) | − 0.912*** (0.182) | 0.145 (0.158) | 0.0252 (0.0409) | − 0.787*** (0.0787) | 0.0579*** (0.0224) |
| Unit labour costs | − 0.0454*** (0.0133) | − 0.0534*** (0.0166) | − 0.0540*** (0.0168) | − 0.000532 (0.000561) | 0.00211 (0.00175) | − 0.000351 (0.000979) |
| Training | 0.0697*** (0.0174) | 0.0831*** (0.0201) | 0.0582*** (0.0181) | 0.0517*** (0.00585) | 0.0541*** (0.00736) | 0.0589*** (0.0102) |
| Regional R&D | 0.0136 (0.0418) | 0.06244 (0.0538) | 0.02296 (0.04668) | 0.01592 (0.01937) | − 0.0013 (0.0261) | − 0.0210 (0.0406) |
| Constant | 16.29*** (0.8034) | 15.083*** (0.9937) | 15.749*** (0.8720) | 14.122*** (0.3575) | 14.0183*** (0.48204) | 13.3334*** (0.7455) |
| Firm fixed effects | Yes | Yes | Yes | Yes | Yes | Yes |
| Year fixed effects | Yes | Yes | Yes | Yes | Yes | Yes |
| Observations | 3,600 | 3,548 | 3,439 | 14,168 | 13,864 | 12,387 |
| R2 | 0.235 | 0.191 | 0.199 | 0.238 | 0.181 | 0.167 |
*p < 0.1; **p < 0.05; ***p < 0.01. Robust standard errors in parentheses. The policy-induced R&D variables correspond to the α term defined in Eq. (2). The number of observations changes in each model due to missing values in the dependent variables. For ease of interpretation, the variables ‘Privately-funded R&D’, ‘Policy-induced: R&D tax credit (α)’, and ‘Policy-induced: R&D grant (α)’ have been scaled by 1 million