An Evaluation of the Impact of Support Policies on the Transition of Knowledge-based Firms to the Growth Stage

Document Type : Original Article

Authors

Graduate School of Management and Economics, Sharif University of Technology, Tehran, Iran

10.22034/jstp.2021.13879

Abstract

New technology-based firms (NTBFs) are the driving force of innovation and technological progress and play a key role in job creation and economic growth.  Given the positive economic and social externalities and existing challenges in the growth path of these firms, governments engage in various support policies. Therefore, evaluating the success of these policies is very essential. In Iran, the Vice President for Science and Technology has implemented policies to support NTBFs since 2013. This study evaluates the effect of innovation policies on improving the probability that NTBFs transit to the growth stage, using official data. The results from a logit model confirm a positive impact from tax credits, low-interest loans, and counseling services on the probability of transition. Also, firms with high-technology products have a higher probability of achieving the growth stage compared to firms with medium-technology products. Finally, NTBFs working in the field of "information and communication technology" have the highest probability of success, while those in the "biotechnology" sector have the lowest probability. Differences in the growth probability in different sectors emphasize the importance of sectoral sectoral prioritization and vertical policies opposed to general and horizontal policies. Effective policies should be analyzed together with highly responsive sector in drafting optimal support policies.
 

Keywords


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