In recent times the service sector is often called the driving force of today's economies. This paper analyses the innovative activities of German service firms. We investigate whether firms that receive public subsidies for innovation projects engage more in innovative activities than others....

The COVID-19 pandemic has affected firms in many economies. Exploiting treatment heterogeneity, we use a difference-in-differences design to causally identify the short-run impact of COVID-19 on innovation spending in 2020 and expected innovation spending in subsequent years. Based on a...