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Do Direct Subsidies Stimulate New R&D Outputs in Firms? Evidence from the Czech Republic

Author

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  • Oleg Sidorkin

    (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences)

  • Martin Srholec

    (CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences)

Abstract

This study examines output additionality effects of direct support to business R&D in the Czech Republic over 2004–2016. Using a large and rich firm-level dataset, we employ a non-parametric propensity score matching estimator to find out whether the subsidies stimulated new applications for formal intellectual property (IP) protection that would not have been made otherwise. The results indicate additionality effects for IP protection of R&D outputs at home but not abroad. Hence, the subsidies have fallen short of expectations for promoting new technology that is sufficiently novel to warrant international IP protection and thus could make a difference in foreign markets. The paper concludes with reflections on how subsidy programmes of this kind are justified, designed and evaluated.

Suggested Citation

  • Oleg Sidorkin & Martin Srholec, 2022. "Do Direct Subsidies Stimulate New R&D Outputs in Firms? Evidence from the Czech Republic," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2203-2229, September.
    • Handle: RePEc:spr:jknowl:v:13:y:2022:i:3:d:10.1007_s13132-021-00812-y
    DOI: 10.1007/s13132-021-00812-y
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    More about this item

    Keywords

    R&D output; Government subsidy; Additionality effect; Microdata; Czechia;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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