Barriers to innovation and subsidy e¤ectiveness
AbstractThis paper explores the effects of R&D commercial subsidies by means of a model of firms’ decisions about performing R&D when some government support can be expected. To estimate the parameters of interest we use an unbalanced panel sample of 1,800 performing and non-performing Spanish manufacturing firms. For the non-performing firms, we compute the trigger subsidies required to induce R&D spending (a measure of market failure). Among the performing …rms, we can detect the ones that would cease to perform R&D if subsidies were eliminated. We also explore the change in the privately financed R&D effort of the performing firms. Results support the claim that market failures are real and subsidies stimulate R&D activities, but also show that actual subsidies go to firms that would have performed R&D otherwise.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidade de Vigo, Departamento de Economía Aplicada in its series Working Papers with number 0112.
Length: 39 pages
Date of creation: Jun 2001
Date of revision:
R&D; innovation; subsidies; thresholds; Tobit model;
Other versions of this item:
- González, X. & Jaumandreu, Jordi & Pazó, Consuelo, . "Barriers to innovation and subsidy effectiveness," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5202, Universidad Carlos III de Madrid.
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
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.:
- Leung, Siu Fai & Yu, Shihti, 1996.
"On the choice between sample selection and two-part models,"
Journal of Econometrics,
Elsevier, vol. 72(1-2), pages 197-229.
- Leung, S.F. & Yu, S., 1992. "On the Choice Between Sample Selection and Two-Part Models," RCER Working Papers 337, University of Rochester - Center for Economic Research (RCER).
- Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 9(2), pages 111-148.
- Xulia González & Jordi Jaumandreu, .
"Threshold effects in product R&D decisions: theoretical framework and empirical analysis,"
Studies on the Spanish Economy
- Jaumandreu, Jordi & González, X., . "Threshold effects in product R&D decisions: theoretical framework and empirical analysis," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5261, Universidad Carlos III de Madrid.
- Xulia González & Jordi Jaumandreu, . "Threshold effects in product R&D decisions: theoretical framework and empirical analysis," Studies on the Spanish Economy 78, FEDEA.
- Klette, Tor Jakob & Moen, Jarle & Griliches, Zvi, 2000. "Do subsidies to commercial R&D reduce market failures? Microeconometric evaluation studies1," Research Policy, Elsevier, vol. 29(4-5), pages 471-495, April.
- Nelson, Forrest D., 1977. "Censored regression models with unobserved, stochastic censoring thresholds," Journal of Econometrics, Elsevier, vol. 6(3), pages 309-327, November.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Patricia González Piñeiro).
If references are entirely missing, you can add them using this form.