Stimulus or Substitute?

Abstract

This article explores three questions related to whether governmental support stimulates or subsidizes innovations, whether firms high in resources, rather than low in resources, benefit from governmental innovation support, and whether governmental innovation support is directed towards innovation high or low in novelty. Findingsfrom a study conducted to explore the effects of a government supported program in Norway, reveal that a subsidizing effect is present in a high fraction of the projects supported, and that firms high in resources are more apt to benefit from governmental support than others, but also that the governmental support is directed towards projects representing solutions high in novelty. Implications of the reported findings are highlighted.