New EC analysis shows impact of Horizon 2020 grants on companies

The European Commission has published a paper which evaluates the causal impact of Horizon 2020 on financial firm-level outcomes using a Difference-in-Differences (DiD) approach. The authors use administrative data from CORDA and financial data from ORBIS spanning from 2010 to 2022, for a sample of approximately 40 thousand unique private companies that applied for Horizon 2020 funding. The paper brings novelty in two ways, first it provides novel evidence on the causal effect of the Horizon 2020 Framework Programme for Research and Innovation as a whole. Second, it identifies in which sectors of the economy EU R&I funding have been more effective.

The findings suggest that firms receiving Horizon 2020 grants exhibit an average increase of 20% in employment and about 30% in total assets and revenues, compared to comparable companies in the control group, in the years after receiving their first grant. Positive effects persist even after 2.5 years, which is the average duration of a project in the sample. Companies in the “Information and communication” and “Professional, scientific and technical activities” NACE sectors are driving the results, while other sectors show insignificant effects.

The paper can be downloaded here:

The Horizon effect - A counterfactual analysis of EU research & innovation grants