The purpose of this study is to explore the additionality of government subsidies on strategic changes in the research and development (R&D) behaviour of recipient firms. Based on 127 government-sponsored R&D programmes over 9 years, input additionality, behavioural additionality, and output additionality were examined. The empirical investigation demonstrates that behavioural additionality of recipient firms could be classified into project enlargement, strategy formulation, cost-effectiveness, and commercialization behaviour. Firms in different industry sectors and innovation categories emphasize different additionality, respectively. Through cluster analysis three kinds of performance patterns in recipient firms are concluded: ideal, compliant, and marginal. The results show that the government must carefully develop evaluation criteria for sponsored programmes in order to direct the behaviour of recipient firms. (C) 2008 Elsevier Ltd. All rights reserved.
