The impact of R&D grants on the performance of New Zealand firms

This paper presents the results from an evaluation of the impact of New Zealand Government R&D grants on the performance of New Zealand firms. The analysis uses information on grants and firm performance from 2004 to 2012 available in Statistics New Zealand’s Longitudinal Business Database. Grant recipients are matched to non-recipients that had a similar propensity to receive a grant. The performance of these two groups of firms is then compared across a range of measures including R&D spending, innovation activity, employment, output, and productivity growth. As the available data precedes the creation of Callaghan Innovation in 2013, this paper does not directly evaluate the performance of Callaghan Innovation’s R&D grants programme. Nevertheless it illustrates the range of insights that can be gained by assessing the impact of government programmes using the LBD, and highlights both the strengths and limitations of using the LBD to evaluate the impact of government interventions.