An Empirical Evaluation of the Effects of R&D Subsidies

University of California, Berkeley, Burch Center Working Paper No. B99/05

38 Pages Posted: 5 Sep 1999

See all articles by Isabel Busom

Isabel Busom

Universitat Autonoma de Barcelona

Multiple version iconThere are 2 versions of this paper

Date Written: May 1999

Abstract

Technology policy is becoming increasingly important in many countries, but there are few studies providing an evaluation based on microeconometric analysis of one common tool, R&D subsidies to private firms. Ex-post policy evaluation, is, however, a necessary step for checking its effectiveness and detecting unanticipated effects. Using a sample of Spanish firms, where half of them received public subsidies for R&D projects, this paper provides evidence on the determinants of firm participation in R&D programs and on the effects that participation has on R&D effort. Results show that firm age and number of patents obtained in the past affect positively the probability to participate, while firm size has a negative effect, probably reflecting the public agency selection rule. Results also show that firm size is negatively related to R&D intensity whether firms are participants or not, and suggest that although in the aggregate complete crowding out effects of public funding can be ruled out, this may not be so for more than a fourth of participants.

JEL Classification: O31, H32, L52

Suggested Citation

Busom, Isabel, An Empirical Evaluation of the Effects of R&D Subsidies (May 1999). University of California, Berkeley, Burch Center Working Paper No. B99/05, Available at SSRN: https://ssrn.com/abstract=170561 or http://dx.doi.org/10.2139/ssrn.170561

Isabel Busom (Contact Author)

Universitat Autonoma de Barcelona ( email )

Departament d'Economia Aplicada
Edifici B - Campus UAB
08193 Bellaterra
Spain
+34 935 81 22 06 (Phone)
+34 935 81 22 92 (Fax)

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