The effect of government-sponsored R&D programmes on additionality in recipient firms in Taiwan

The purpose of this study is to explore the additionality of government subsidies on strategic changes in the research and development (R&D) behaviour of recipient firms. Based on 127 government-sponsored R&D programmes over 9 years, input additionality, behavioural additionality, and output additionality were examined. The empirical investigation demonstrates that behavioural additionality of recipient firms could be classified into project enlargement, strategy formulation, cost-effectiveness, and commercialization behaviour. Firms in different industry sectors and innovation categories emphasize different additionality, respectively. Through cluster analysis three kinds of performance patterns in recipient firms are concluded: ideal, compliant, and marginal. The results show that the government must carefully develop evaluation criteria for sponsored programmes in order to direct the behaviour of recipient firms.