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The Effect of R&D Subsidies on Private R&D


Holger Gorg


Kiel Institute for the World Economy; Institute for the Study of Labor (IZA)

Eric Strobl


Ecole Polytechnique, Paris - Department of Economic Sciences; Institute for the Study of Labor (IZA)

Economica, Vol. 74, No. 294, pp. 215-234, May 2007

Abstract:     
This paper investigates the relationship between government support for R&D and R&D expenditure financed privately by firms using a comprehensive plant level data set for the manufacturing sector in the Republic of Ireland. We find that for domestic plants small grants serve to increase private R&D spending, while too large a grant may crowd out private financing of R&D. In contrast, evidence for foreign establishments suggests that grant provision causes neither additionality nor crowding out effects of private R&D financing, regardless of the size of the subsidy.

Number of Pages in PDF File: 20

Accepted Paper Series


Date posted: April 11, 2007  

Suggested Citation

Gorg, Holger and Strobl, Eric, The Effect of R&D Subsidies on Private R&D. Economica, Vol. 74, No. 294, pp. 215-234, May 2007. Available at SSRN: http://ssrn.com/abstract=978555 or http://dx.doi.org/10.1111/j.1468-0335.2006.00547.x

Contact Information

Holger Görg (Contact Author)
Kiel Institute for the World Economy ( email )
P.O. Box 4309
Kiel, D-24100
Germany
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Eric Strobl
Ecole Polytechnique, Paris - Department of Economic Sciences ( email )
Ecole Polytechnique
Department of Economics
Paris, 75005
France
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
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