Abstract

This study evaluates the effectiveness of national and international R&D support programmes on firms' technology scouting, defined as firms' use of external knowledge sources.
Drawing on a unique dataset on R&D support programmes for small and medium-sized enterprises (SMEs) operating in both manufacturing and service sectors across 28 European countries, this study reports treatment effects estimated by the copula-based endogenous switching model, which takes into account unobserved firm heterogeneity.
Empirical results indicate that R&D support programmes have heterogeneous effects on technology scouting. In particular, a crowding out effect arises in the case of informal sources of external knowledge, while additional effects are reported for formal, strategic sources.
For informal sources of external knowledge, a random distribution of R&D measures would have a substantially larger effect rather than using current selection criteria.
This is among first study to explore the policy effects on technology scouting applying a copula-based endogenous switching model. Most cross-sectional empirical studies employ matching estimators, although their main disadvantage is the selection on observables.