Public support for innovation and the openness of firms’ innovation activities

This study explores empirically the relationship between publicly funded schemes to support innovation and the “openness” of firms’ innovation practices. Using survey data from more than 5000 firms in 29 European countries, we find that support policies for innovation, both monetary and non-monetary, are related to an increase in the degree of openness of individual firms, both in terms of the number of external partners with whom they collaborate and the number of open innovation activities they perform. However, the relationship between support and openness seems to be negatively moderated by the existence of previous innovative activity within the firm. Public support has more impact on less innovative firms and less influence when the firm is already innovative, which could potentially indicate the existence of crowding-out effects. Additionally, our results suggest that non-financial support is more strongly linked to openness than financial support. For policy makers facing salient budgetary constraints, this implies that institutions and government policies could potentially play a more important role than money in fostering open innovation. This article contributes to the open innovation literature by tapping into the underexplored question of the role of public policies and has crucial implications for academics and policy makers.