Firm location affects the firm-level impacts of Research and Development (R&D) grants, but the mechanisms through which such location effects occur remain underexplored and unresolved in the literature.

We explore this by considering two key spatial characteristics: (1) population agglomeration economies (i.e. urban/rural firms); and (2) within-industry concentration effects.

Using novel data and combining matching, weighting and regression-based approaches, we find within-industry concentration effects to accentuate the impact of R&D grants on firms’ R&D expenditure and R&D employment. We only find population agglomeration economies to matter for R&D employment.

Given the policy relevance of the use of scarce public resources (in this instance in the form of R&D grants) to drive firm-level outcomes and stimulate place-based development efforts, we conclude by discussing potential policy insights derived from our analysis.

Helena Lenihan is Full Professor of Economics at the Kemmy Business School, University of Limerick. She is an applied economist whose research interests include the economics of innovation, R&D subsidies and tax incentives, innovation policy, policy evaluation, innovation and human capital, green/eco innovation, firm growth and industrial policy.

Helena was Principal Investigator on a large research project (2008-2024) funded by Science Foundation Ireland/Research Ireland. This research project evaluates the impact of innovation and science policy instruments on firm performance from national and international perspectives.

She has generated significant research funding from both academic (e.g. EU-FP7, Irish Research Council, Royal Irish Academy) and policymaking (e.g. Enterprise Ireland) sources. Helena was an invited Visiting Fellow at Judge Business School, University of Cambridge, UK. She was also a Visiting Fellow at Wolfson College, University of Cambridge, where she is now a lifetime member.

She is a Research Associate at the UK's Enterprise Research Centre. Helena regularly acts as advisor to industrial/enterprise and regional policymakers.