The “sugar rush” from innovation subsidies: a robust political economy perspective

PublicationArticle (with peer review)
Alice Hallman, Anders Gustafsson, Andreas Stephan, Financing of Innovations, Företagandets villkor, Företagsstöd, Nils Karlson, Politisk ekonomi

Abstract

The governments of most advanced countries offer some type of financial subsidy to encourage firm innovation and productivity. This paper analyzes the effects of innovation subsidies using a unique Swedish database that contains firm level data for the period 1997–2011, specifically informa tion on firm subsidies over a broad range of programs. Applying causal treatment effect analysis based on matching and a diff-in-diff approach combined with a qualitative case study of Swedish innovation subsidy programs, we test whether such subsidies have positive effects on firm performance. Our results indicate a lack of positive performance effects in the long run for the majority of firms, albeit there are positive short-run effects on human capital investments and also positive short-term productivity effects for the smallest firms. These findings are interpreted from a robust political economy perspective that reveals that the problems of acquiring correct information and designing appropriate incentives are so complex that the absence of significant positive long-run effects on firm performance for the majority of firms is not surprising.
Related content: Working Paper No. 270

Gustafsson, A., Stephan, A., Hallman, A., & Karlson, N. (2016). The “sugar rush” from innovation subsidies: a robust political economy perspective. Empirica, 43(4), 729-756. DOI: 10.1007/s10663-016-9350-6


Similar content

Reviving Classical Liberalism Against Populism
BookPublication
Karlson, N. (2024). Reviving Classical Liberalism Against Populism. Palgrave Macmillan Cham.
Publication year

2024

Published in

Palgrave Macmillan Cham.

Abstract

How can we fight back against the populist threat to liberty, free markets, and the open society?

This open access book by Nils Karlson explores the strategies used by left- and right-wing populists to make populism intelligible, recognizable, and contestable. Karlson argues that to fight back requires the revival of liberalism itself by defending and developing the liberal institutions, the liberal spirit, liberal narratives, and liberal statecraft. The book presents a synthesized explanatory model for how populists promote autocratization through the deliberate polarization of society and traces the ideational roots of the core populist ideas that form a collectivistic identity politics. Written within the tradition of political theory and institutional economics, this book uses a wide variety of sources, including results and analyses from social psychology, ethics, law, and history.

The book is open source and can be downloaded through the link below.

Ratio Working Paper No. 353: From free competition to fair competition on the European internal market
Working paperPublication
Karlson, N., Herold, T. & Dalbard, K.
Publication year

2022

Published in

Ratio Working Paper

Abstract

This paper investigates whether an increased use and reinterpretation of what has been called “fair competition” has occurred at the expense of “free competition” among the central institutions of the European Union. We are also interested in assessing how frequently these terms have been used by the various EU institutions over time.

We have empirically examined this through a quantitative survey of more than 12,000 public documents, out of totally 242 000 documents containing 630 million words, in the EUR-lex database over the last 50 years, from 1970 to 2020. Our conclusion is that the emphasis of the common policies in the EU is likely to have shifted from free competition and an open market economy to “fair competition” in the sense of a level playing field, in official EU documents, such as treaties, EU acts institutions, preparatory documents relating to EU directives and recommendations including motions and resolutions, case law and more.

The European Commission has been a driving force in this development, followed closely by the European Parliament and subsequently by the Council of Ministers. This change entails a risk that the regulation of the European internal market has shifted so that the dynamics of the internal market and thus the EU’s competitiveness will weaken. The change also entails a centralization of decisions at EU level at the expense of the Member States.

Myten om centralisering – Om sjukvården som ett polycentriskt system
ReportsPublication
Karlson, N. & Lundbäck, M.
Publication year

2021

Published in

Ratioakademiens sjukvårdsprojekt

Abstract

Sammanfattning:
Syftet med denna rapport är att analysera sjukvården utifrån ett polycentriskt perspektiv, i jämförelse med ett monocentriskt, mer centraliserat, samt att diskutera hur ökade polycentriska inslag skulle kunna utveckla svensk vård och omsorg. Författarnas hypotes är att vård- och omsorgssystem som utmärks av en mångfald av finansiärer och utförare, med stora inslag av valfrihet och spritt ansvar, klarar vårduppdraget lika bra eller bättre än mer centraliserade och helt skattefinansierade system.

Show more