Measuring the economic impact of research joint ventures supported by the EU Framework Programme

Abstract

The objective of this paper is to analyse the effects of international R&D cooperation on firms' economic performance. Our approach, based on a complete data set with information about Spanish participants in research joint ventures supported by the EU Framework Programme during the period 1995-2005, establishes a recursive model structure to capture the relationship between R&D cooperation, knowledge generation and economic results, which are measured by labour productivity. In the analysis we take into account that the participation in this specific type of cooperative projects implies a selection process that includes both the self-selection by participants to join the consortia and the selection of projects by the European Commission to award the public aid. Empirical analysis has confirmed that: (1) R&D cooperation has a positive impact on the technological capacity of firms, captured through intangible fixed assets and (2) the technological capacity of firms is positively related to their productivity.

The Impact of International Research Joint Ventures on SMEs Performance

“…Whereas the effect on innovativeness is demonstrated, no clear evidence is obtained about economic performance. Barajas et al (2011) go a step forward and corroborate that the impact of cooperation within the FP on firms' productivity is produced through the indirect channel of intangible assets. This result is obtained considering that FP consortia carry out precompetitive projects and their impact should be measuredfrom a long-term perspective.…”

“…cooperative FP projects will be generated in the medium-long term. In Barajas et al (2011) a period t+5 is considered because supported projects present a clear pre-competitive orientation. However, as the European Commission (2010) points out, the nature of R&D activities supported under SME-specific measures of the sixth FP focuses on finding solutions to technical problems that SMEs identify, that mainly constitute applied research.…”

“…To control for the double-selection process in the participation within FP programs (participants self-selection and the selection by the European agency), instead of introducing the observed status of participation, following Barajas et al (2011) we use the predicted value of the probability of participating obtained from an auxiliary estimation.…”

“…As we 9 In Table B1, the first column exhibits the coefficients of the Probit model for the SMEs decision to apply for an FP project, while the second one corresponds to the determinants of the probability of being awarded the subsidy by the EC. The explanatory variables included in this estimate also follow the selection made by Barajas et al (2011) for a sample of SMEs and large firms which apply for other FP programs. In addition, specific characteristics of Cooperative and Collective Projects and the firms´ age are considered.…”

“…Following Barajas et al (2011), in this analysis we take into account that the participation in this specific type of cooperative projects implies a selection process that 9 includes both the self-selection by participants to join the consortia and the selection of projects by the European Commission to award the public aid. To face this doubleselection problem, instead of the dummy for observed participation, in empirical specifications of [1] and [2] we include the prediction of the probability of participating that we obtain from an auxiliary estimation of two equations for the probability of applying for a cooperative project (involving at least one Spanish SME) and the probability of awarding by the European Commission.…”