My paper “Public funding for innovation and the exit of firms” [this is a pre-print version] is now published in the August issue of the Journal of Evolutionary Economics.

The paper focuses on the effect public subsidies for innovation have on the exit of firms. Utilizing Finnish firm level data I employ a kernel matching approach to eliminate the selection bias of public funding and estimate the counterfactual. As a robustness check a treatment model is estimated. Public funding for innovation exhibits a significant effect reducing the probability of exit. Distinguishing between exit by merger and exit by closure shows that public funding has a significant effect on the former. No significant effect on the latter can be found.