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Value for money? New microeconometric evidence on public R&D grants in Flanders

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  • Czarnitzki, Dirk
  • Lopes-Bento, Cindy

Abstract

A significant amount of money is spent on programs to stimulate innovative activities. In this paper, we review the effects of a specific government-sponsored commercial R&D program from various angles. We start by evaluating whether we find positive effects of subsidies on R&D investment and R&D employment. Then, we analyze how the observed effects of subsidies on R&D intensity and employment vary over time, vary if the firm receives also support from other sources, vary depending on how many supported projects a single firm has at the same time or vary if a firm gets support consecutively. Finally, we estimate the macroeconomic impact of these grants in terms of R&D employment. We conclude that (i) the policies are not subject to full crowding out, (ii) the treatments effects are stable over time, (iii) receiving subsidies from other sources in addition to the program under evaluation does not decrease the estimated treatment effect, and (iv) receiving grants repeatedly does not decrease the magnitude of the treatment effects either. Using a back-of-the envelope calculation, we estimate that, on average, five R&D jobs are created (or maintained) per supported project in the Flemish economy. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 12-034.

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Date of creation: 2012
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Handle: RePEc:zbw:zewdip:12034

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Cited by:
  1. Castellacci, Fulvio & Lie, Christine, 2013. "Do the effects of R&D tax credits vary across industries? A meta-regression analysis," MPRA Paper 47937, University Library of Munich, Germany.
  2. LOPES BENTO Cindy & HOTTENROTT Hanna, 2012. "(International) R&D Collaboration and SMEs: The effectiveness of targeted public R&D support schemes," CEPS/INSTEAD Working Paper Series 2012-36, CEPS/INSTEAD.
  3. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
  4. Hottenrott, Hanna & Lopes-Bento, Cindy, 2014. "(International) R&D collaboration and SMEs: The effectiveness of targeted public R&D support schemes," Research Policy, Elsevier, vol. 43(6), pages 1055-1066.

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