The automotive industry is a major pillar of the modern global economy and one of Europe’s key industries. There can hardly be any doubt about the important role of this sector as an engine for employment, growth and innovation in Europe, and there are crucial challenges and opportunities...

We investigate the effect of R&D subsidies on firms' innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms while it does not differ substantially by...