Value for Money? New Microeconometric Evidence on Public R&D Grants in Flanders

K. U. Leuven, Dept. of Managerial Economics, Strategy and Innovation, OR 1207

43 Pages Posted: 11 Jan 2013

See all articles by Dirk Czarnitzki

Dirk Czarnitzki

Centre for European Economic Research (ZEW); Catholic University of Leuven (KUL)

Cindy Lopes-Bento

K.U.Leuven; ZEW

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2012

Abstract

A significant amount of money is spent on programs to stimulate innovative activities. In this paper, we review the effects of a specific government-sponsored commercial R&D program from various angles. We start by evaluating whether we find positive effects of subsidies on R&D investment and R&D employment. Then, we analyze how the observed effects of subsidies on R&D intensity and employment vary over time, vary if the firm receives also support from other sources, vary depending on how many supported projects a single firm has at the same time or vary if a firm gets support consecutively. Finally, we estimate the macroeconomic impact of these grants in terms of R&D employment. We conclude that (i) the policies are not subject to full crowding out, (ii) the treatments effects are stable over time, (iii) receiving subsidies from other sources in addition to the program under evaluation does not decrease the estimated treatment effect, and (iv) receiving grants repeatedly does not decrease the magnitude of the treatment effects either. Using a back-of-the envelope calculation, we estimate that, on average, five R&D jobs are created (or maintained) per supported project in the Flemish economy.

Suggested Citation

Czarnitzki, Dirk and Lopes-Bento, Cindy, Value for Money? New Microeconometric Evidence on Public R&D Grants in Flanders (March 1, 2012). K. U. Leuven, Dept. of Managerial Economics, Strategy and Innovation, OR 1207. Available at SSRN: https://ssrn.com/abstract=2198843 or http://dx.doi.org/10.2139/ssrn.2198843

Dirk Czarnitzki

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
Mannheim, 68034
Germany

Catholic University of Leuven (KUL) ( email )

Faculty of Economics and Business
Naamsestraat 69
Leuven, 3000
Belgium
+32 16 326906 (Phone)
+32 16 325799 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/msi/faculty_members.htm

Cindy Lopes-Bento (Contact Author)

K.U.Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

ZEW ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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