DO RESEARCH AND INNOVATION STIMULI IMPROVE THE COMPETITIVENESS OF PRIVATE FIRMS? EVIDENCE FROM THE SLOVAK REPUBLIC

The paper analyses financial indicators of 550 R&I-intensive Slovak firms receiving support from the European Structural and Cohesion Funds (SF and CF) in the period 2009-2014. The research tests the hypothesis that assistance from the SF and CF improves economic performance of the supported firms. The research combines data from public and private resources. It applies the Difference-in-Differences evaluation method with the Propensity Score Matching (PSM) technique. The PSM technique was used to create comparable structures of the treatment and control groups. The selection of performance variables reflected their economic importance and data availability. The most important variables included sales, gross operating surplus (profit), total assets, and own capital. Development in financial indicators for supported/unsupported firms between the periods 2012-2014 and 2009-2011 was compared via the t-test. Results of the evaluation indicated that enterprises receiving support from the European resources accounted for better financial results than those of enterprises receiving no support from the SF and CF. The increase in sales in the period 2012-2014 compared to the period 2009-2011 was the most important indicator of improved competitiveness. Sales accounted for the best availability of data. Sales are also a more realistic indicator than profits in the annual accounts of the Slovak companies. Profits are more prone to manipulation in the enterprise accounts. The evaluation exercise was commissioned by the Government Office of the Slovak Republic. Results of the evaluation exercises were transferred to policy recommendations for the 2014-2020 programming period. Firms applying for support from the national public and/or European resources must provide good-quality data on their past R&I spending and financial performance. As to compare the performance of supported and unsupported firms, data on sales and employment seem to be more useful than data on profits, as well as the return on assets and equity.