The Impact of Public Funding on Private R&D investment: New Evidence from a Firm Level Innovation Study

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The Impact of Public Funding on Private R&D investment: New Evidence from a Firm Level Innovation Study

Author Info

Lööf, Hans () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Heshmati, Almas (heshmati@snu.ac.kr)

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Abstract

This paper investigates the effectiveness of a public innovation policy aimed at stimulating private R&D investment. The research will examine whether public funding increases the total spending on research or merely displaces funding from private sources. The empirical analysis is based on the Community Innovation Survey data merged with register data. It is an evaluation of whether firms receiving public funds have on average a higher R&D intensity compared to those not receiving any such support. In order to account for possible selectivity bias, and to improve comparability of firms, two different versions of a semi-parametric matching approach are employed. The two matching estimators result in somewhat different results. The Nearest Neighbour estimator is preferred to the Kernel estimator. The results support the hypothesis suggesting that there are additive effects of public R&D financing on private research expenditures only for small firms

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Publisher Info
Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 6.

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Length: 26 pages
Date of creation: 23 Nov 2004
Date of revision: 01 Mar 2005
Handle: RePEc:hhs:cesisp:0006

Note: The paper has been revised and the title has been changed
Contact details of provider:
Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Find related papers by JEL classification:
C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
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
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2004-12-02 (All new papers)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Aerts, Kris & Schmidt, Tobias, 2006. "Two for the price of one? : On additionality effects of R&D subsidies ; a comparison between Flanders and Germany," ZEW Discussion Papers 06-63, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
Tommy Clausen, 2008. "Do subsidies have positive impacts on R&D and innovation activities at the firm level?," Working Papers on Innovation Studies 20070615, Centre for Technology, Innovation and Culture, University of Oslo. [Downloadable!]

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