Impact assessment of Bpifrance’s financial support to SMEs’ innovation projects

Abstract

This paper evaluates the economic impact of Bpifrance’s financial programmes to support SMEs’ Research, Development and Innovation (RDI), called individual aid for innovation (IA). It focuses on the analysis of subsidies and zero-interest loans granted to SMEs over three years old during the period 2005-2018 in order to foster their RDI activity (R&D expenses and spending related to the development of innovative products, processes or services) and economic growth (turnover, employment). We use a difference-in-differences methodology combined with a propensity score matching procedure to compare supported SMEs with non-supported SMEs with same initial characteristics. This counterfactual analysis is based on a unique dataset containing both financial and non-financial information about millions of French companies. Up to 12,000 SMEs supported over the 2005-2016 period have thus been analysed, making this study the first to estimate the effect of Bpifrance’s individual aid for innovation on such a scale and using such detailed information.