Promoting Innovation: The Differential Impact of R&D Subsidies

Reda Cherif, Fuad Hasanov, Christoph Grimpe, Wolfgang Sofka

Publikation: Working paperForskning


We investigate the effect of R&D subsidies on firms’ innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms while it does not differ substantially by firm size. Domestic firms have a larger response in R&D spending in low-tech manufacturing, knowledge-intensive services, and technological services while the response of domestic and foreign MNCs is broadly similar and is greater in medium-tech and high-tech manufacturing. Foreign MNC subsidiaries’ response in terms of patents is greater than that of domestic MNCs in most industries.
UdgivelsesstedWashington, D.C.
UdgiverInternational Monetary Fund
Antal sider41
StatusUdgivet - 2022
NavnIMF Working Paper


  • Innovation
  • Patents
  • Research and development
  • R&D
  • Subsides
  • Multinationals
  • Investments
  • Technology policy