Government R&D subsidies are more important in latecomer countries of biotechnology industry, where venture capital has not been developed, and ratio of start-ups is high.
Previous studies were limited to the promotion of input and output, such as private R&D investment and performance, through government R&D subsidies.
However, these studies cannot reflect the change of a firm’s behavior (or strategy) by a government R&D subsidy.
Therefore, this study extensively investigated the effects of government R&D subsidies in multifaceted aspects of input, output, and behavioral additionality.
By adopting the propensity score matching (PSM) method, we found firms benefiting from government R&D subsidies had marked higher R&D investment
in terms of input additionality and produced more technological innovation within a short period in terms of output additionality, although financial performance was not determined.
Moreover, government R&D subsidies have accelerated strategic alliances and suppressed external financing in terms of behavioral additionality.
Additionality; Government R&D Subsidies; Biotechnology Industry; Propensity Score Matching