Economics of Innovation at TUM

Our research in the area of applied microeconomics focuses on the economics of innovation and the economics of science.

Research News

Research on the effectiveness of public subsidies for start-ups forthcoming in "Research Policy"

Publikationen |


New knowledge-intensive firms contribute to innovation, competition, and employment growth, but externalities like knowledge spillovers can prevent entrepreneurs from appropriating the full returns from their investments. In addition, uncertainty and information asymmetry pose challenges for financing. Public policy programs therefore aim to support start-ups. This study evaluates the effects of participation in such programs on the performance of start-ups in high-tech and knowledge-intensive sectors that were founded in Germany between 2005 and 2012. Distinguishing between grants and subsidized loans and after matching recipients and non-recipients based on a broad set of founder and company characteristics, we find that both grants and subsidized loans facilitate tangible investment, employment and revenue growth. Grants are, however, better suited to increasing R&D investments than loans are. Combined with grants, subsidized loans facilitate turning research results into marketable products by means of investments in tangible assets. Start-ups that participate in both types of programs outperform grant-only recipients in terms of innovation performance, employment and future revenues. Finally, program participation does not crowd out private venture capital.


Recent Publications (click to see all publications)

Research and product or process development are two distinct, yet complementary innovation activities. Making use of a specific grant-based policy design that explicitly distinguishes between research projects, development projects, and mixed R&D projects, this study estimates the direct and cross scheme effects on both research and development investments of recipient firms. Positive cross scheme effects can be expected when research and development activities are complementary and financing constraints are more binding for research than for…

This study sheds light on the unexplored phenomenon of multiple institutional affiliations using scientific publications. Institutional affiliations are important in the organisation and governance of science. Multiple affiliations may alter the traditional framework of academic employment and careers and may require a reappraisal of institutional assessment based on research outcomes of affiliated staff. Results for authors in three major science and technology nations (Germany, Japan and the UK) and in three fields (biology, chemistry, and…

Academics are increasingly encouraged to acquire external grants to finance their research, and often hold grants from multiple funders concurrently to ensure the continuity of their work. However, there are concerns that inefficiencies occur when funding is received from multiple sponsors, especially when this originates from different sectors. This study investigates complementarities between public/non-profit and private sector sources of research funding with regard to academic output in terms of publications, research impact and research…

We present empirical evidence suggesting that weak tax enforcement proxied by the extent of tax evasion in a country acts like a lower corporate tax rate in attracting profits of multinational corporations.

This study investigates induced productivity effects of firms introducing new environmental technologies. The literature on within-firm organisational change and productivity suggests that firms can achieve higher productivity gains from adopting new technologies if they adapt their organisational structures. Such complementarity effects may be of particular importance for the adoption of greenhouse gas (GHG) abatement technologies. The adoption of these technologies is often induced by public authorities to limit the social costs of climate…

R&D collaboration facilitates the pooling of complementary skills, learning from the partner as well as the sharing of risks and costs. Research therefore stresses the positive relationship between collaborative R&D and innovation performance. Fewer studies address the potential drawbacks of collaborative R&D. Collaborative R&D comes at the cost of coordination and monitoring, requires knowledge disclosure, and involves the risk of opportunistic behavior by the partners. Thus, while for lower collaboration intensities the net gains can be high,…