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Two for the price of one? : On additionality effects of R&D subsidies ; a comparison between Flanders and Germany

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Author Info
Aerts, Kris
Schmidt, Tobias

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Abstract

In this paper we empirically test whether public R&D subsidies crowd out private R&D investment in Flanders and Germany, using firm level data from the Flemish and German part of the Community Innovation survey (CIS III and IV). Both the non-parametric matching estimator and the conditional difference-in-difference estimator with repeated cross-sections (CDiDRCS) clearly indicate that the crowding-out hypothesis can be rejected: funded firms are significantly more R&D active than non-funded firms. In the domain of additionality effects of R&D subsidies, this paper is the first to apply the CDiDRCS method. --

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Publisher Info
Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 06-63.

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Date of creation: 2006
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Handle: RePEc:zbw:zewdip:5457

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Related research
Keywords: R&D; Subsidies; Policy Evaluation; Conditional Difference-in-Difference;

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Find related papers by JEL classification:
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods

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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:
  2. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 930-949, Winter.
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  4. Hujer, Reinhard & Radic, Dubravko, 2005. "Evaluating the Impacts of Subsidies on Innovation Activities in Germany," ZEW Discussion Papers 05-43, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  5. Paul A. David & Bronwyn H. Hall & Andrew A. Toole, 2000. "Is Public R&D a Complement or Substitute for Private R&D? A Review of the Econometric Evidence," Development and Comp Systems 9912002, EconWPA. [Downloadable!]
    Other versions:
  6. Bruno Van Pottelsberghe & Esmeralda Megally & Steve Nysten, 2003. "Evaluation of current fiscal incentives for business R&D in Belgium," Working Papers CEB 03-011.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB). [Downloadable!]
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  10. repec:fth:harver:1473 is not listed on IDEAS
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    Other versions:
  14. Holger Gorg & Eric Strobl, 2007. "The Effect of R&D Subsidies on Private R&D," Economica, London School of Economics and Political Science, vol. 74(294), pages 215-234, 05. [Downloadable!] (restricted)
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    Other versions:
  17. Saul Lach, 2000. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," NBER Working Papers 7943, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  18. Czarnitzki, Dirk & Hussinger, Katrin, 2004. "The Link Between R&D Subsidies, R&D Spending and Technological Performance," ZEW Discussion Papers 04-56, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  19. Reinhard Hujer & Dubravko Radic, 2005. "Evaluating The Impacts Of Subsidies On Innovation Activities In Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(4), pages 565-586, 09. [Downloadable!] (restricted)
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    Other versions:
  22. Michael Lechner, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA). [Downloadable!]
  23. Dirk Czarnitzki, 2006. "Research And Development In Small And Medium-Sized Enterprises: The Role Of Financial Constraints And Public Funding," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(3), pages 335-357, 07. [Downloadable!] (restricted)
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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.)

  1. Tobias Schmidt & Birgit Aschhoff, 2007. "Die Nutzung der Innovationsdaten des Mannheimer Innovationspanels für die Politikberatung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(3), pages 17-28. [Downloadable!] (restricted)
  2. Donja Darai & Jens Grosser & Nadja Trhal, 2009. "Patents versus Subsidies – A Laboratory Experiment," Working Papers 0905, University of Zurich, Socioeconomic Institute. [Downloadable!]
  3. Erol Taymaz & Yeşim Üçdoğruk, 2009. "Overcoming the double hurdles to investing in technology," Small Business Economics, Springer, vol. 33(1), pages 109-128, June. [Downloadable!] (restricted)
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