A microeconomic assessment of RTO's impact on Firms output

A microeconomic assessment of RTO's impact on Firms output: The case of TNO

Poliakov, E.V.
Hu, J.
Boonman, H.J.
de Heide, M.J.L.

2019

This study estimates the economic impact of Research and Technology Organisations (RTOs) on firms’ productivity. The effectiveness and efficiency of public intervention has become a prominent aspect in the design of measures addressing RTOs, and their subsequent allocation of public support. This also holds for financing. As a way to indicate their relevance and role in the innovation system of RTOs such as the Dutch RTO, TNO, RTOs should therefore be able to indicate the impact of the knowledge they create on the economy. This goes beyond providing insight into the economic footprint of the financing of RTOs, i.e. “rippling effect” resulting from (re)spending of the financial support; on salaries, equipment, etc. Results show that firms that use TNO services have 14-17 percent higher value added in the next year, compared to similar firms that did not use TNO services. We correct for selection bias of firms that use TNO services, by applying the propensity score matching method that ensures that firms in the treatment group and control group are comparable. For each firm in the treatment group, a counterfactual with a similar probability to use TNO services is selected in the control group. Our results are in line with existing research assessing the role and relevance of RTOs. We subsequently can conclude that the impact of RTOs is significantly positive on firm output.

Return on R&D
RTO's
Impact assessment
Firm productivity

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TNO

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