This study examines the effect of research and development subsidies on the private funding of R&D in France. We address this issue from the annual R&D survey over 1985-1997, which provides information about the R&D subsidies given by all the ministries to the firms having at least one full-time person working on R&D. In order to determine whether the supported firms would have invested the same amount of private R&D without the subsidies, we use matching methods. We show that the use of these methods is important because the global evaluations, in this paper, more often give a potential effect among the non-supported firms than a real effect among the supported firms. We first study the probability to get a subsidy. We find that this probability is increasing with size, the debt ratio and the importance of privately funded R&D. In a second step, controlling for the past public support the firms benefited from, we find that, on average, public funds add to private funds, so that there would be no significant crowding out effect.
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Paper provided by EconWPA in its series Public Economics with number
0411007.
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.:
Cohen, Wesley M & Klepper, Steven, 1996.
"A Reprise of Size and R&D,"
Economic Journal,
Royal Economic Society, vol. 106(437), pages 925-51, July.
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