Regional Perspective on R&D Policies for SMEs: Does Success Breed Success?

In this paper, we examine the effects of EU policy schemes that support innovation in small and medium-sized enterprises. Since the effectiveness of innovation schemes can be expected to differ across Europe as entrepreneurship and innovation tend to be more intense in more developed regions, we postulate that the effect of EU instruments on additionality increases with the level of development. We offer a multi-country perspective using two waves of Community Innovation Survey data (CIS 2008 and CIS 2012). We find that the impact of EU funding depends on the level of country’s innovativeness: both national and EU public schemes exhibit smaller additionality in less developed countries, while crowding-out is observed only in recently joined EU members.