Radical innovations require risk-taking. However, it is hard to find an objective measure for innovation investments … that would take riskiness into account. In this paper, we investigate how a simple measure of firms’ innovation investments …. We then build a simple model where firms’ innovation activities and firm risk are interrelated. We use the model to …

diffusion of knowledge between firms. Non-innovation subsidies, in contrast, appear to support established industry structures …The bulk of innovation subsidies in Finland are allocated to firms in industries where the employment share of … among young firms. At the firm level, an increase in innovation subsidies is typically associated with an inflow of …