Financing Innovation: Evidence from R&D Grants

Transcription

1 Fnancng Innovaton: Evdence from R&D Grants Sabrna T. Howell Onlne Appendx Fgure 1: Number of Applcants Note: Ths fgure shows the number of losng and wnnng Phase 1 grant applcants over tme by offce (Energy Effcency & Renewable Energy and Fossl Energy). Note that frms may appear more than once. Appendx 1

2 Fgure 2: Densty of Applcants by Normalzed Rank Note: Ths fgure shows applcant densty by normalzed rank. Fgure 3: Baselne Covarate Predcted Probablty of VC Fnancng after Grant by Rank (Phase 1) Note: Ranks hgher than 0 awarded a grant. Data for phase 1 awards (1st tme wnners) after % confdence ntervals shown. Covarates nclude VC^Prev, MSA, Age, Mnorty_owned, Woman_owned, Ext^Prev, #SBIR^Prev, Patents^Prev, Ctatons^Prev. Appendx 2

3 Fgure 4: Future Patents n Domnant Patent Subclass of Applcants around Phase 1 Cutoff Note: Ths fgure shows the dstrbuton of frms by the number of future patents n the frm s domnant patent subclass, grouped by rank around the cutoff. Each dot s the domnant subclass for an applcant at a partcular rank. Appendx 3

4 Fgure 5: Domnant Patent Subclass of Applcants around Phase 1 Cutoff Note: Ths fgure shows the dstrbuton of patent subclasses around the cutoff. Each dot s x-coordnate s ts rank around the cutoff, the z-coordnate s the frm s domnant patent subclass (the subclass n whch t most frequently patents), and the y-coordnate s the number of frms that occupy that x-z bn (the number of frms n a certan rank wth a certan domnant subclass). The graph shows that the same subclasses n smlar concentratons are present on both sdes of the cutoff. Appendx 4

5 Fgure 6: Probablty of Ext (IPO or Acquston) Before and After Grant Decson by Rank Note: Ths fgure shows the fracton of applcants who ever experenced an ext (IPO or acquston) ever pror to (5A) and ever after (5B) the Phase 1 grant award decson. The applcants are bnned by ther DOE assgned rank, whch I have centered so that Rank > 0 ndcates a frm won an award. Capped lnes ndcate 95% confdence ntervals. N=4,816. Fgure 7: Probablty of VC After Phase 1 Grant by Rank and Number of Awards n Competton Appendx 5

6 Table 1: Summary Statstcs for Prvate Fnancng Matches (Number of Deals or Frms) Applcant frms matched to 1 PF deal 838 Applcant frms matched to 1 VC deal 683 PF deals matched to applcant frms (Some companes have multple fundng events) 3,751 VC deals 2,638 Seed/Angel 178 Seres A 1,313 Seres B 561 Seres C+ 587 Acqustons 221 IPOs 27 Debt deals 196 PE Buyout deals 59 Project Fnance 61 PF deals wth data on deal sze (amount) 2,141 VC deals wth data on deal sze (amount) 1,728 Unque applcants wth 1 PF deal & 0 grant wns 565 Unque applcants wth 1 VC deal & 0 grant wns 451 Unque applcants wth 1 PF deal & 1 grant wns 273 Unque applcants wth 1 VC deal & 1 grant wns 232 Note: PF= all prvate fnance; VC=venture captal (subset of PF). Sources: ThompsonOne VentureSource, Preqn, Cleantech Group s 3 Platform, CrunchBase, and CaptalIQ Appendx 6

7 Table 2: Rank Producton Functon Dependent Varable: R I. All Covs II. Select Covs VC Prev ** (0.0321) (0.0304) #SBIR Prev ** *** ( ) ( ) MSA (0.137) (0.0971) Age ( ) Ext Prev (0.211) Patent Prev (0.117) (0.0797) Ctaton Prev (0.102) (0.0715) Competton f.e. Y Y N R Note: Ths table reports regresson estmates of the effect of the baselne covarates on the Phase 1 rank. Column I ncludes all observables whle column II uses only varables avalable for the full dataset. Standard errors are robust and clustered at topc-year level. *** p<.01. Year 1995 Table 3: T-tests for dfference of means mmedately around cutoff Covarate N X1 X 1 t-statstc H 1 p-value H 2 p-value MSA Age Mnorty W oman Ext Prev #SBIR Prev PF Prev VC Prev Patent Prev Ctaton Prev Note: Ths table tests for contnuty of all baselne covarates mmedately around the cutoff for the Phase 1 award, comparng centered ranks R =1and R = 1. Frst-tme wnners only; test performed wthout assumng equal varance. Year 1995 Appendx 7

8 Table 4: Patent Class Growth Panel 1: T-tests of Future Patents n Frm s Domnant Patent Class Around Award Cutoff Grantees Losers p-value Mean (s.e.) N Mean (s.e.) N Phase 1; Bandwdth=1 10,118 (741) ,462 (521) Phase 1; Bandwdth=all 9,926 (677) 297 9,616 (303) 1, Phase 2 8,019 (566) 276 8,790 (707) Panel 2: Regressons of Award Status on Future Patents n Applcant Domnant Patent Subclass Dependent varable: Award Phase: Phase 1 Phase 2 Bandwdth: All 1 All I. II. III. IV. V. Future Patents n Class/10, (.01) (.0074) (.0066) (.015) (.02) Normalzed rank.12***.09*** (.026) (.015) N R Note: Ths table uses the classes n whch frms patent and all future patents n that class (from whole USPTO database) to test whether awardees dsproportonately patent n technologcal growth areas. I assgn each frm wth 1patenttsmodalclass.Panel1:t-testsfordfferencesaroundthe cutoff n average future patents for frm s domnant class. Panel 2: OLS regressons n whch award s regressed on the future patents n domnant class varable, to assess whether future patents can predct awards. *** p<.01. Year Appendx 8

9 Table 5: Impact of Grant Interacted wth Frm s Prevous SBIR Awards Dependent varable: I. VC post II. ln 1+Ctes post III. Revenue IV. In Bus Post V. Ext post Award Norm. SBIR prev -.041* -.19* * -.03** (.023) (.097) (1) (.023) (.013) Award.12***.54***.27.18***.035*** (.019) (.075) (.2) (.028) (.011) Norm. SBIR prev.063***.79*** 1.6***.089***.032*** (.018) (.085) (.26) (.02) (.011) Competton f.e. Y Y Y Y Y N R Note: Ths table s an RD estmatng va OLS the mpact of the Phase 1 grant (1 R > 0) nteracted wth the number of prevous non-doe SBIR awards (from other government agences, e.g. DOD, NSF), normalzed by demeanng and dvdng by 100. All models use bandwdth 2. The full ZINB model s shown for revenue (column III). Standard errors robust and clustered at topc-year level. *** p<.01. Year 1995 Table 6: Impact of Grant on Subsequent Prvate Fnance wth Lnear and Quadratc Control Functons Dependent Varable: PF Post Bandwdth: All I. II. III. IV. V. VI. VII. Award 0.12*** 0.12*** 0.23*** 0.13*** 0.29*** 0.12*** 0.11*** (0.037) (0.028) (0.0623) (0.027) (0.051) (0.023) (0.037) Norm. rank ** -0.12*** (0.022) (0.029) (0.0081) Norm. rank *** (0.0085) ( ) Controls Y Y Y Y Y Y Y Competton f.e. Y Y Y Y Y Y Y N R Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) onallprvate fnance. The specfcatons are varants of the model n Equaton 1. The dependent varable PF Post s 1 f the company ever receved PF after the award decson, and 0 f not. Controls: prevous VC, prevous all-gov t SBIR awards. Standard errors robust and clustered at topc-year level. *** p<.01. Year 1995 Appendx 9

10 Table 7: Estmatng Spllovers wth the Number of Awards n a Competton Dependent Varable: VC post Comparng effect on VC, among losers, of compettons wth 1awardvs.> 1 award (1 # Awards > 1) Comparng effect on VC, among losers, of compettons wth apple 2 award vs. > 2 awards Same MSA Dfferent MSAs V&VI I. II. III. IV. V. VI. VII. (.01) (.011) (1 # Awards > 2) (.011) (.011) Award.11**.078***.078*** Award 1 Same MSA Prev 1 Same MSA Prev (.052) (.025) (.025) Normalzed rank, N Y N Y Y Y Y Normalzed rank 2 Controls Y Y Y Y Y Y Y Year f.e. Y Y Y Y N N N Competton f.e. N N N N Y Y Y.029 (.056) -.11*** N R Note: Ths table reports regresson estmates of the effect of havng multple awards n the competton for losers, usng a bandwdth of all the data. The sample only ncludes losng frms. I control for rank n columns II and IV, and do not n columns I and III. I expect that negatve spllovers wll cause the ndcators for more wnners to have postve coeffcents. Controls are normalzed rank, normalzed rank squared, prevous VC nvestment and prevous SBIR awards from all gov t agences, whch are the only covarates wth predctve power over the outcome and rank, respectvely. V & VI nclude frms from the same and dfferent ctes (MSAs), respectvely, wthn a topc. In the MSA analyss, I use a bandwdth of all and control for rank and ts nteracton wth the same MSA ndcator. Standard errors are robust and clustered at the topc-year level. *** p<.01. Year 1995 (.013) Appendx 10

11 Table 8: Correlaton of Characterstcs Used n Heterogenety Analyss 1 Age apple 2 1 No Ctes Prev 1 Age apple 2-1 No Ctes prev Emergng Sector Emergng Sector Hardware 1 Hardware Note: Ths table shows correlaton coeffcents between varables used n the heterogenety analyss. Table 9: Impact of Phase 1 Grant Amount on Subsequent Venture Captal (VC) Investment Dependent Varable: VC Post I (Grant= $100,000) II (Grant= $150,000) III. I vs. II IV. Interacton w/ grant amount (whole sample) Award.086***.18***.086*** -.15 (.033) (.045) (.028) (.13) Award 1 Year2 [2010, 2011].093** (.045) 1 Year2 [2010, 2011] (.059) Norm. Rank (.0029) (.0036) (.0028) (.015) Norm. Rank 1 Year2 [2010, 2011].0019 Award Grant Amt Grant Amt (.0046).2** (.099) (.036) Norm. Rank Grant Amt Sector f.e. Y Y Y N Year-sector f.e. N N N Y (.011) N R Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) on VC. Specfcatons are varants of Equaton 1, usng BW=all. In columns I-III I also control for prevous VC, and n column III also nteract t wth the dummy for In column III, sector f.e. are nteracted w/1 Year2 [2010, 2011], and n column IV year-sector f.e. are nteracted wth the grant amount. Note that here the Award coeffcent s the effect of treatment when the grant amount s zero, whch obvously does not occur n the data. In columns I-III, standard errors robust; n subsequent columns clustered by topc-year. Grant amount s dvded by 100,000 to make the coeffcents of reasonable sze. *** p<.01. Appendx 11

12 Table 10: Grant Use Survey Response Sample Selecton Tests Panel 1: Surveyed Frms Non-responders Responders Mean (std dev) N Mean (std dev) N 2-taled t-test p-value for dff of means 1-taled t-test p-value for dffof means Frst year won Phase (3.7) **.018** (3.4) Last year won Phase (2.27) **.020** (2.25) Number Phase 1 awards 1.9 (2.5) (3.0) Number Phase 2 awards.56 (1.0) (1.3) LnCtes post.41 (1.1) (.79) Ctes post 6.6 (35) (16) * VC post.27 (.44) (.47) Panel 2: All Grantees Surveyed Non-surveyed Mean (std dev) N Mean (std dev) N Two-taled t-test p-value for dfference of means One-taled t-test p-value for dfference of means Frst year won Phase (3.6) ***.00*** (5.6) Last year won Phase (2.3) **.001*** (2.5) Number Phase 1 awards 3.07 (3.4) (2.7) ***.00*** Number Phase 2 awards.58 (1.1) (1.3) **.025** LnCtes post.36 (1.0) (1.7) ***.00*** Ctes post 5.5 (31) (84) ***.0017*** VC post.29 (.45) (.40) ***.010*** Note: Ths table tests whether the responders to the grant use survey were systematcally dfferent from the non-responders. All 347 frms that receved a Phase 1 grant n 2005 or later and are stll n busness (In Bus post one-taled p-value. =1) were contacted. Responses were obtaned for 94 frms. I report the smaller Appendx 12

13 Table 11: Impact of Grant on Subsequent VC by Cutoff Pont (by Number of Awards n Competton) Dependent Varable: VC Post Bandwdth: 1 All # Awards: I. 1 II. > 1 III. 2 IV. 3 V. > 3 1 R > 0.11**.088**.14**.18**.13 (.05) (.041) (.054) (.089) (.086) Normalzed rank (.014) (.027) (.017) Normalzed rank *** (.0012) (.0021) (.00072) Controls Y Y Y Y Y Comp. f.e. Y Y Y Y Y N R Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) on VC, where each column ncludes only compettons wth the desgnated number of awards. The specfcatons are varants of the model n Equaton 1. Controls are prevous VC nvestment and prevous all-gov t SBIR awards. Standard errors are robust and clustered at topc-year level. *** p<.01. Year 1995 Appendx 13

14 Table 12: Impact on VC wth Absolute Rank (Non-Centered) Dummes Dependent Varable: VC Post I. Rank Dummes II. Award Dummy & Rank Dummes III. Award Dummy, Controls &RankDummes 1 R > *** 0.139*** (0.0402) (0.0406) VC Prev 0.323*** (0.0295) #SBIR Prev *** ( ) R = *** * (0.0274) (0.0466) (0.0472) R = (0.0188) (0.0176) (0.0178) R = (0.0239) (0.0226) (0.0217) R = (0.0291) (0.0283) (0.0264) R = ** * (0.0354) (0.0344) (0.0300) R = ** * (0.0399) (0.0375) (0.0313) R = ** * * (0.0472) (0.0450) (0.0400) R = ** * (0.0568) (0.0560) (0.0532) R = *** ** *** (0.0662) (0.0650) (0.0555) R = (0.101) (0.0960) (0.0841) R = (0.0976) (0.0928) (0.0782) R = *** ** (0.0603) (0.0565) (0.0480) R = (0.244) (0.234) (0.229) R = (0.485) (0.473) (0.485) N R Note: Ths table reports regresson estmates usng absolute rank dummes rather than centered/percentle contnuous rank varables. Column I projects VC fnance on only the rank dummes, and subsequent columns nclude Phase 1 treatment (1 R > 0) Standarderrorsare robust and clustered at topc-year level. *** p<.01. Year 1995 Appendx 14

15 Table 13: Impact of Grant on VC wth Logt Model Dependent Varable: VC post Bandwdth: All I. II. III. IV. V. VI. VII. VIII. 1 R > *** 1.11*** 1.18*** 1.04*** 1.25*** 1.12*** 1.16*** 1.04*** (0.35) (0.245) (0.25) (0.19) (0.23) (0.17) (0.18) (0.16) VC Prev 2.633*** 2.3*** 2.76*** 2.41*** 2.54*** 2.25*** 2.44*** 2.29*** (0.4) (0.3) (0.29) (0.21) (0.26) (0.19) (0.18) (0.15) #SBIR Prev 0.013*** *** 0.009*** *** *** *** *** *** (0.0027) (0.0025) (0.0023) (0.0018) (0.0021) (0.0017) (0.0014) (0.0013) Competton f.e. Y N Y N Y N Y N Topc f.e. N Y N Y N Y N Y N Pseudo-R Note: Ths table reports logt regresson estmates of the effect of the Phase 1 grant (1 R > 0) on VC. The specfcatons are varants of the model n Equaton 1. Standard errors are robust and clustered at topc-year level. *** p<.01. Year 1995 Appendx 15

16 Table 14: Impact of Grant on All Outcomes wth Alternatve Fxed Effects Panel 1 Dep. Varable: VC post ln 1+Ctes post Revenue I. II. III. IV. V. VI. VII. VIII. IX. Award.099***.094***.1***.34***.34***.28***.97* 1.02** 1.2** (.021) (.021) (.021) (.09) (.091) (.1) (.50) (.49) (.47) Sector f.e. N Y Y N Y Y N Y Y Year f.e. Y Y N Y Y N Y Y N N R Panel 2 Dep. Varable: In Bus post Ext post I. II. III. IV. V. VI. Award.12***.12***.11***.044***.044***.044*** (.033) (.033) (.032) (.014) (.014) (.013) Sector f.e. N Y Y N Y Y Year f.e. Y Y N Y Y N N R Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) onalloutcomesusng bandwdth 1. The specfcatons are varants of the model n Equaton 1, wth alternatve fxed effects. Standard errors are robust and clustered at topc-year level. *** p<.01. Year 1995 Appendx 16

17 Table 15: Impact of Grant on All Outcomes wth Alternatve Standard Errors Panel 1 Dependent Varable: VC post ln 1+Ctes post Revenue Bandwdth: 1 All 1 1 All 1 1 All 1 Std error clusterng: Rank Competton Rank Competton Rank Competton I. II. III. IV. V. VI. VII. VIII. IX. Award.1***.061**.1***.33***.2*.33** 1.7* 0.67* 1.7* (.0034) (.028) (.034) (.027) (.11) (.15) (0.17) (0.38) (0.93) Norm. rank, Norm. rank 2 N Y N N Y N N Y N Competton f.e. Y Y Y Y Y Y Y Y Y N R Panel 2 DependentVarable: In Bus post Ext post Bandwdth: 1 All 1 1 All 1 Std error clusterng: Rank Competton Rank Competton I. II. III. IV. V. VI. Award.15*.14***.15*** **.046* (.02) (.025) (.058) (.016) (.019) (.025) Norm. rank, Norm. rank 2 N Y N N Y N Competton f.e. Y Y Y Y Y Y N R Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) onalloutcomesusng bandwdth 1 or all. The specfcatons are varants of the model n Equaton 1. Standard errors are robust and clustered as specfed. *** p<.01. Year 1995 Appendx 17

18 Dependent Varable: Table 16: Varaton n Covarates, Rank Control, and Dependent Varable VC post ln 1+VC Amt post VC Deals post I. II. III. IV. V. VI. Award.11**.083**.089***.064* 1.8**.8*** Age (.045) (.042) (.023) (.036) (.89) (.29) (.0022) Hardware (.032) In Major MSA (.059) Prev. non-doe SBIRs *** (.00048) VC prev.44*** (.06) Ctes prev (.0004) MSA VC nvestment * ( ) MSA medan ncome * (.0015) Mnorty-owned.012 (.068) Woman-owned (.082) ln (1 + VC Amt prev ) *** (.0016) Norm. rank lose (.016) (.5) (.14) Norm. rank wn ** (.042) (.14) (.043) Competton f.e. Y Y Y Y Y Y N R (Pseudo-R 2 ) Note: Ths table reports regresson estmates of the effect of the Phase 1 grant (1 R > 0) usng varants of the model n Equaton 1 wth a bandwdth of 3. Standard errors are robust and clustered at the sector-year level. *** p<.01. Year 1995 Appendx 18