National and international R&D support programmes and technology scouting in European small and medium enterprises

Abstract

Purpose This study aims to evaluate the effectiveness of national and international R&D support programmes on firms’ technology scouting, defined as firms’ use of external knowledge sources. Design/methodology/approach Drawing on a unique data set 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. Findings 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, whereas additional effects are reported for formal, strategic sources. Practical implications 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. Originality/value To the best of the authors’ knowledge, this is the first study to explore the policy effects on technology scouting applying a copula-based endogenous switching model. Most cross-sectional empirical studies use matching estimators, although their main disadvantage is the selection on observables.