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Input and Output Additionality of R&D Subsidies

Author

Listed:
  • Dirk Czarnitzki

    (KU Leuven, Belgium)

  • Katrin Hussinger

    (CREA, Université du Luxembourg)

Abstract

This paper analyzes the effects of public R&D subsidies on R&D input and output of German firms. We distinguish between the direct impact of subsidies on R&D investments and the indirect effect on innovation output measured by patent applications. We disentangle the productivity of purely privately financed R&D and additional R&D investment induced by the public incentive scheme. For this, a treatment effect analysis is conducted in a first step. The results are implemented into the estimation of a patent production function in a second step. It turns out that both purely privately financed R&D and publicly induced R&D show a positive effect on patent outcome.

Suggested Citation

  • Dirk Czarnitzki & Katrin Hussinger, 2017. "Input and Output Additionality of R&D Subsidies," DEM Discussion Paper Series 17-12, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:17-12
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    More about this item

    Keywords

    R&D; Subsidies; Patents; Treatment Effects;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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

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