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This paper compares the role of innovation and economic performance across European and Latin American countries, using firm-level data from France, Spain, Switzerland, Argentina, Brazil and Mexico. We implement a standard structural model linking R&D intensity, innovation and productivity. We find evidence revealing structural differences between Europe and Latin America, but also the presence of heterogeneity within each. In particular, firms tend to engage in innovation activities in order to achieve better economic performance on a similar basis among countries, but their interaction with national systems is weaker in developing countries. The fact of being a foreign subsidiary of a foreign multinational is found to have a heterogeneous effect on innovativity, whereas it leads to increased productivity in every country.R&D, innovation, productivity, developing countries, MNEs,

International audienceThis study analyzes the effect of public R&D subsidies on private R&D expenditure in a sample of French firms during the period 1993–2009. We evaluate whether there is any input additionality of public R&D subsidies by distinguishing between R&D tax credit recipient and non-recipient firms. In addition, combining difference-in-differences with propensity score and exact (both simple and categorical) matching methods, we assess the effect of R&D subsidies between treated (subsidy recipients) and controls (subsidy non-recipients) as well as between differently treated (small, medium and large subsidy recipient) firms. Furthermore, we implement a dose–response matching approach to determine the optimality of public R&D subsidy provisions. We find evidence of either no additionality or substitution effects between public and private R&D expenditure. Crowding-out effects appear to be more pronounced for medium-high levels of public subsidies, and generally under the R&D tax credit regime. A number of robustness checks corroborate our main findings