Online citations, reference lists, and bibliographies.
← Back to Search

Do Companies Benefit From Public Research Organizations? The Impact Of The Fraunhofer Society In Germany

D. Comin, G. Licht, Maikel Pellens, T. Schubert
Published 2019 · Business

Cite This
Download PDF
Analyze on Scholarcy
Among available policy levers to boost innovation, investment in applied research organisations has received little empirical attention. In this paper, we analyse the case of the Fraunhofer Society, the largest public applied research organization in Germany. We analyse whether project interaction with Fraunhofer affects the performance and strategic orientation of firms. To that end, we assemble a unique dataset based on the confidential Fraunhofer-internal project management system and merge it with the German contribution to the Community Innovation Survey (CIS), which contains panel information on firm performance. Using instrumental variables that exploit the scale heteroscedasticity of the independent variable (Lewbel, 2012), we identify the causal effects of Fraunhofer interactions on firm performance and strategies. We find a strong, positive effect of project interaction on growth in turnover and productivity. In particular, we find that a one percent increase in the size of the contracts with FhG leads to an increase in growth rate of sales by 1.3 percentage points, and to an increase in the growth rate of productivity by 0.8 percentage points in the short-run. We also provide evidence of considerable long-run effects accumulating to 18% growth in sales and 12% growth in productivity over the course of 15 years. More detailed analyses reveal, amongst others, that the performance effects become stronger the more often firms interact with Fraunhofer and that interactions aiming at generation of technology have a stronger effect than interactions aiming merely at the implementation of existing technologies. Finally, we provide evidence on the macroeconomic productivity effects of Fraunhofer interactions on the German economy. Our results indicate that doubling Fraunhofer revenues from industry (+€ 0.68 bn.) would increase overall productivity in the German economy by 0.55%.
This paper references
Recent developments in the econometrics of program evaluation
G. W. Imbens (2008)
The Impact of Monetary Policy on Asset Prices
R. Rigobón (2002)
Designing ex-post assessment of corporate RDI policies: conceptualisation, indicators and modelling
Giovanni Cerulli (2012)
The tariff on animal and vegetable oils
Philip G. Wright (1928)
Another look at the instrumental variable estimation of error-components models
M. Arellano (1995)
Innovation and Learning: The Two Faces of R&D
W. Cohen (1989)
Cooperative R&D and Firm Performance
René A. Belderbos (2004)
Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models
A. Lewbel (2012)
R & D tax policy during the 1980 s : Success or failure ?
B. H. Hall (1993)
Volatility and links between national stock
M. King (1994)
Some tests of specification for panel data : monte carlo evidence and an application to employment equations
I. Salihu (2015)
University Research Alliances, Absorptive Capacity, and the Contribution of Startups to Employment Growth
Andrew A. Toole (2014)
Intellectual Property Rights and Innovation: Evidence from the Human Genome
Heidi Williams (2010)
Identification, Estimation and Testing of Conditionally Heteroskedastic Factor Models
G. Fiorentini (1998)
Patent Rights, Innovation and Firm Exit
A. Galasso (2015)
How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome
B. Sampat (2019)
Do the effects of R&D tax credits vary across industries? A meta-regression analysis
F. Castellacci (2013)
Explicit and implicit tax effects of the R&D tax credit
P. G. Berger (1993)
Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis
F. Murray (2007)
The Global Effects of R&D Tax Incentives: Evidence from Micro-Data
Bodo Knoll (2014)
Same but different? Research and technology organizations, universities and the innovation activities of firms
Eleni Giannopoulou (2019)
Innovation in Germany - Results of the German CIS 2006 to 2010. Background report on the Innovation Surveys 2007, 2009 and 2011 of the Mannheim Innovation Panel
B. Aschhoff (2013)
The Identification Problem in Econometrics.
G. Maddala (1969)
Testing for weak instruments in linear IV regression
J. H. Stock (2005)
Oslo Manual: Proposed guidelines for collecting and interpreting innovation data, 3rd edition
OECD (2005)
Do Tax Credits Stimulate R&D Spending? The Effect of the R&D Tax Credit in Its First Decade
N. Rao (2015)
Evaluating the Impact of R&D Tax Credits on Innovation: A Microeconometric Study on Canadian Firms
D. Czarnitzki (2005)
Annual report
M. Ivimey (1958)
Do Tax Incentives for Research Increase Firm Innovation? An Rd Design for R&D
Antoine Dechezleprêtre (2016)
The Impact of R&D Subsidies on Firm Innovation
Raffaello Bronzini (2016)
You can lead a firm to R&D but can you make it innovate? UK evidence from SMEs
M. Cowling (2016)
Identification through heteroscedasticity
R. Rigobon (2003)
A heteroscedasticity-consistent covariance matrix estimator and a direct test for heteroscedasticity
H. White (1980)
Internal and External Effects of R&D Subsidies and Fiscal Incentives: Empirical Evidence Using Spatial Dynamic Panel Models
Benjamin Montmartin (2015)
Econometric Analysis of Cross Section and Panel Data
Jeffrey M. Woodbridge (2002)
R&D tax policy during the 1980s: Success or failure
B. H. Hall (1993)
Patents and Cumulative Innovation: Causal Evidence from the Courts
A. Galasso (2013)
Does knowledge diffusion between university and industry increase innovativeness?
H. Lööf (2008)
Do R&D tax credits work? Evidence from a panel of countries 1979–1997
N. Bloom (2002)
Determinants of university–firm R&D collaboration and its impact on innovation: A perspective from a low-tech industry
O. Maietta (2015)
The effects of R&D tax credits on patenting and innovations
Ådne Cappelen (2012)
Effectiveness of fiscal incentives for R&D: quasi-experimental evidence
Irem Guceri (2019)
A note on studentizing a test for heteroscedasticity
R. Koenker (1981)
Volatiltiy and Links between National Stock Markets
M. A. King (1994)
Cooperation with public research institutions and success in innovation: Evidence from France and Germany
S. Robin (2013)

This paper is referenced by
Semantic Scholar Logo Some data provided by SemanticScholar