Page 17 - IDEA Study 8 2017 Direct subsidies and R&D output in firms

In addition to business enterprises, the IMPULS, TIP and ALFA programmes also provided funding to public research organizations, including universities and research institutes, as members of project consortia. However, the question of the subsidies’ output additionality effects is primarily relevant to profit-oriented private ventures. Hence, for the purpose of this study we limit the sample to subjects with the following legal forms: 1. General partnership (Veřejná obchodní společnost) 2. Private limited company (Společnost s ručením omezeným) 3. Joint-stock company (Akciová společnost) 4. Limited partnerships (Komanditní společnost) 5. Cooperative (Družstvo) Moreover, it is well-established in the innovation literature that formal instruments of IP protection are used much more intensively in some industries than others (Hall et al. 2014). Arguably, it would make little sense to evaluate R&D outputs based on applications for formal IP protection instruments in sectors that usually rely on informal methods of protection, such as secrecy, lead time, or complexity of design. Hence, we further narrow down our sample to include only firms whose principal activity is classified as belonging to one of the industries (B, C, D and E) or services sectors (J and M), in which formal IP protection methods are known to be relevant means of protecting technology (alphabetical codes of NACE, rev. 2 classification in brackets):8 1. B - Mining and quarrying 2. C - Manufacturing 3. D - Electricity, gas, steam and air-conditioning supply 4. E - Water supply, sewerage, waste management and remediation activities 5. J - Information and communication 6. M - Professional, scientific and technical activities 8 According to the merged PATSTAT-AMADEUS database, these sectors jointly account for about 89.2% of all applications for patents of invention filed by Czech enterprises with the selected legal forms during the period 2004-2013. These same sectors received the lion’s share of public R&D subsidies distributed through the IMPULS, TIP and ALFA programmes. In particular, enterprises classified in C – Manufacturing and M - Professional, scientific, and technical activities stand out, with a combined share of about 80% of the total amount subsidies provided through all three programmes. 15