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Evaluating innovation policy: a structural treatment effect model of R&D subsidies Author info | Abstract | Publisher info | Download info | Related research | Statistics Takalo, Tuomas () (Bank of Finland Research)
Tanayama, Tanja () (HECER, University of Helsinki)
Toivanen, Otto () (HECER, University of Helsinki)
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registered author(s):
This paper studies the welfare effects of R&D subsidies. We develop a model of continuous optimal treatment with outcome heterogeneity where the treatment outcome depends on applicant investment. The model takes into account heterogeneous application costs and identifies the treatment effect on the public agency running the programme. Under the assumption of a welfare-maximizing agency, we identify general equilibrium treatment effects. Applyiing our model to R&D project-level data we find substantial treatment effect heterogeneity. Agency-specific treatment effects are smaller than private treatment effects. We find that the rate of return on subsidies for the agency is 30–50%.
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Paper provided by Bank of Finland in its series Research Discussion Papers with number
7/2008.
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Length: 59 pages
Date of creation: 11 Mar 2008Date of revision:
Handle: RePEc:hhs:bofrdp:2008_007Contact details of provider: Postal: Bank of Finland, P.O. Box 160, FI-00101 Helsinki, Finland Web page: http://www.bof.fi/en/tutkimus More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Minna Valkama).
Keywords: applications ; effort ; investment ; R&D ; selection ; subsidies ; treatment programme ; treatment effects ; welfare ; Other versions of this item:
Find related papers by JEL classification: C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
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