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The effectiveness of R&D subsidies: A meta-regression analysis of the evaluation literature

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  • Dimos, Christos
  • Pugh, Geoff

Abstract

Widespread and increasing public subsidy for research and development (R&D) has given rise to a large and growing number of evaluation studies. While economic theory identifies market failures that justify public support, theory also suggests reasons why returns might be disappointing. Similarly, the empirical literature investigated – 52 micro-level studies published since 2000 on either input or output R&D – reports a wide range of findings. The lack of conclusiveness both of theory and of the evaluation literature motivate this Meta-Regression Analysis (MRA). This study contributes to policy debate by identifying a representative subsidy effect: after controlling for publication selection bias and for a wide range of sample and study heterogeneities, MRA findings reject crowding out of private investment by public subsidy but reveal no evidence of substantial additionality. In addition, among the research practices explaining the heterogeneous effects reported in this literature, those related to the treatment of unobservable firm heterogeneity are particularly important.

Suggested Citation

  • Dimos, Christos & Pugh, Geoff, 2016. "The effectiveness of R&D subsidies: A meta-regression analysis of the evaluation literature," Research Policy, Elsevier, vol. 45(4), pages 797-815.
  • Handle: RePEc:eee:respol:v:45:y:2016:i:4:p:797-815
    DOI: 10.1016/j.respol.2016.01.002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Diego d’Andria & Dimitrios Pontikakis & Agnieszka Skonieczna, 2018. "Towards a European R&D incentive? An assessment of R&D provisions under a common corporate tax base," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(5-6), pages 531-550, August.
    2. Marino, Marianna & Lhuillery, Stephane & Parrotta, Pierpaolo & Sala, Davide, 2016. "Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure," Research Policy, Elsevier, vol. 45(9), pages 1715-1730.
    3. Benjamin Montmartin & Marcos Herrera & Nadine Massard, 2018. "The Impact of the French Policy Mix on Business R&D: How Geography Matters," GREDEG Working Papers 2018-09, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. repec:eee:tefoso:v:127:y:2018:i:c:p:1-7 is not listed on IDEAS
    5. Arthur Korus, 2016. "Currency Overvaluation and R&D Spending," EIIW Discussion paper disbei218, Universitätsbibliothek Wuppertal, University Library.
    6. repec:eee:respol:v:46:y:2017:i:8:p:1465-1478 is not listed on IDEAS
    7. repec:eee:respol:v:47:y:2018:i:3:p:623-636 is not listed on IDEAS
    8. repec:nea:journl:y:2017i:34:p:59-93 is not listed on IDEAS
    9. repec:gam:jsusta:v:10:y:2018:i:6:p:1692-:d:148444 is not listed on IDEAS
    10. Bernini, Cristina & Cerqua, Augusto & Pellegrini, Guido, 2017. "Public subsidies, TFP and efficiency: A tale of complex relationships," Research Policy, Elsevier, vol. 46(4), pages 751-767.
    11. repec:eee:tefoso:v:127:y:2018:i:c:p:38-56 is not listed on IDEAS
    12. Heim, Sven & Hüschelrath, Kai & Schmidt-Dengler, Philipp & Strazzeri, Maurizio, 2017. "The impact of state aid on the survival and financial viability of aided firms," European Economic Review, Elsevier, vol. 100(C), pages 193-214.
    13. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute for the Study of Labor (IZA).
    14. Ugur, Mehmet & Trushin, Eshref, 2018. "Asymmetric information and heterogeneous effects of R&D subsidies: evidence on R&D investment and employment of R&D personel," Greenwich Papers in Political Economy 21943, University of Greenwich, Greenwich Political Economy Research Centre.
    15. repec:eee:tefoso:v:127:y:2018:i:c:p:97-111 is not listed on IDEAS
    16. repec:eee:respol:v:47:y:2018:i:7:p:1256-1266 is not listed on IDEAS
    17. repec:eee:respol:v:46:y:2017:i:9:p:1570-1579 is not listed on IDEAS
    18. repec:eee:respol:v:47:y:2018:i:1:p:108-120 is not listed on IDEAS
    19. repec:eee:enepol:v:113:y:2018:i:c:p:430-438 is not listed on IDEAS
    20. repec:eee:respol:v:46:y:2017:i:6:p:1142-1161 is not listed on IDEAS
    21. repec:eee:respol:v:46:y:2017:i:10:p:1851-1862 is not listed on IDEAS

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