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Puzzles of the State Aid Rules on RDI journal article

Caroline Buts, Phedon Nicolaides, Hans Pirlet

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 489 - 509

Despite the improvement of the State aid rules on Research, Development and Innovation (RDI) during the past decade, stakeholders have claimed that the current rules are at points ambiguous, which results in a negative impact on innovation. By means of an exploratory case study and participatory action research, this article aims to identify the ambiguities in the RDI rules. While the rules are detailed and overall well explained, we detect three themes where ambiguities arise, ie non-economic activities, price calculation of goods or services provided by research organisations, and ancillary activities of research organisations together with the 20% threshold. For each of these categories, we discuss what constitutes a ‘safe’ interpretation of the concepts involved. This entails an interpretation that is in line with the case law as well as with the spirit of State aid control. Where appropriate and possible, we provide examples as well as suggestions for their practical implementation. Next to providing guidance regarding the detected ambiguities, this article aspires a contribution to the forthcoming revision of the State aid rules for RDI. Keywords: State aid policy; Research, Development and Innovation; GBER; RDI Framework.


The Effectiveness of R&D&I Subsidies to Young Innovative Companies in Belgium journal article

Diego Andres Olaya Lasso, Caroline Buts

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 177 - 191

Innovation is of crucial importance in modern knowledge and information driven economies. Small and medium-sized enterprises (SMEs) are relatively dynamic and thus essential in the generation of inventions. However, SMEs’ innovative performance is not uniform and a particularly interesting subgroup has been identified: Young Innovative Companies (YICs). While YICs’ favourably influence also the macroeconomic competitiveness of a country, little research has been carried out regarding the effects of diverse support policies. This article hence aims to contribute to the literature by examining the role of subsidies on the innovative performance of YICs. We build a dataset of all Belgian companies and monitor firm level microdata from 2010 until 2015. The empirical analysis aims, in a first stage, to identify the population of YICs in Belgium and the main industries where they operate. In a second phase, we then evaluate whether YICs have a superior innovative performance relative to other types of businesses and especially whether support policies have been effective in stimulating their innovations. From the negative binomial model, we conclude that subsidies prove to be an essential policy instrument favouring the creation of inventions by YICs. It is important for policy to promote and support YICs’ entrepreneurship before as well as during their way towards innovation. Keywords: Innovation; Subsidy; R&D; Young Innovative Company; Count Models.

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