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Input Additionality Effects of R&D Subsidies in Austria. Empirical Evidence from Firm-level Panel Data

Author

Listed:
  • Gerhard Streicher
  • Andreas Schibany
  • Nikolaus Gretzmacher

    (Joanneum Research, Institute of Technology and Regional Policy)

Abstract

In this paper we study the question of the leverage effect of public subsidies to private R&D: do public contributions to private R&D boost total R&D expenditures – and if so, do they boost them by an amount which is larger than the amount of public money which was used in this way? The paper is based on firm-level data from the Austrian Industrial Research Promotion Fund (FFF) which occupies a central role in the promotion of industrial research in Austria. The results of the panel regression suggest that the public subsidies of private R&D have a crowding-in effect of about 40 percent; 1 additional euro of funding induces firms to contribute an additional 0,40 € of their own money. Both very small and large firms seem to exhibit higher leverage, small and medium-sized firms smaller leverage. Additionally, the leverage estimates for firms that perform R&D only occasionally are higher than for regular R&D performers.

Suggested Citation

  • Gerhard Streicher & Andreas Schibany & Nikolaus Gretzmacher, 2004. "Input Additionality Effects of R&D Subsidies in Austria. Empirical Evidence from Firm-level Panel Data," WIFO Studies, WIFO, number 25159, April.
    • Handle: RePEc:wfo:wstudy:25159
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    References listed on IDEAS

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    7. Nikolaus Gretzmacher & Gernot Hutschenreiter & Wolfgang Polt, 2002. "Changing Strategies for Business R&D and their Implications for Science and Technology Policy. Proceedings of the tip Workshop," WIFO Studies, WIFO, number 22214, April.
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    Cited by:

    1. Desiderio Romero-Jordán & María Delgado-Rodríguez & Inmaculada Álvarez-Ayuso & Sonia Lucas-Santos, 2014. "Assessment of the public tools used to promote R&D investment in Spanish SMEs," Small Business Economics, Springer, vol. 43(4), pages 959-976, December.
    2. Falk, Rahel, 2007. "Measuring the effects of public support schemes on firms' innovation activities: Survey evidence from Austria," Research Policy, Elsevier, vol. 36(5), pages 665-679, June.
    3. Michel Dumont, 2013. "Working Paper 01-13 - The impact of subsidies and fiscal incentives on corporate R&D expenditures in Belgium (2001-2009)," Working Papers 1301, Federal Planning Bureau, Belgium.
    4. Correa, Paulo & Andres, Luis & Borja-Vega, Christian, 2013. "The impact of government support on firm R&D investments : a meta-analysis," Policy Research Working Paper Series 6532, The World Bank.
    5. Rahel Falk, 2006. "Measuring the Effects of Public Support Schemes on Firms' Innovation Activities. Survey Evidence from Austria," WIFO Working Papers 267, WIFO.
    6. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    7. Aschhoff, Birgit, 2009. "The effect of subsidies on R&D investment and success: do subsidy history and size matter?," ZEW Discussion Papers 09-032, ZEW - Leibniz Centre for European Economic Research.
    8. Martin Falk & Mariya Hake, 2008. "Wachstumswirkungen der Forschungsausgaben," WIFO Studies, WIFO, number 34120, April.

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