IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v45y2016i4p797-815.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733316000032
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. T.D. Stanley & Hristos Doucouliagos, 2010. "Picture This: A Simple Graph That Reveals Much Ado About Research," Journal of Economic Surveys, Wiley Blackwell, vol. 24(1), pages 170-191, February.
    2. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
    3. Bronwyn H. Hall, 2002. "The Assessment: Technology Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 18(1), pages 1-9, Spring.
    4. T.D. Stanley & Hristos Doucouliagos & Margaret Giles & Jost H. Heckemeyer & Robert J. Johnston & Patrice Laroche & Jon P. Nelson & Martin Paldam & Jacques Poot & Geoff Pugh & Randall S. Rosenberger & , 2013. "Meta-Analysis Of Economics Research Reporting Guidelines," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 390-394, April.
    5. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    6. Nicholas Bloom & Mark Schankerman & John Van Reenen, 2013. "Identifying Technology Spillovers and Product Market Rivalry," Econometrica, Econometric Society, vol. 81(4), pages 1347-1393, July.
    7. Dirk Czarnitzki & Hanna Hottenrott & Susanne Thorwarth, 2011. "Industrial research versus development investment: the implications of financial constraints," Cambridge Journal of Economics, Oxford University Press, vol. 35(3), pages 527-544.
    8. Mark Koetse & Raymond Florax & Henri Groot, 2010. "Consequences of effect size heterogeneity for meta-analysis: a Monte Carlo study," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 19(2), pages 217-236, June.
    9. Giovanni Cerulli, 2010. "Modelling and Measuring the Effect of Public Subsidies on Business R&D: A Critical Review of the Econometric Literature," The Economic Record, The Economic Society of Australia, vol. 86(274), pages 421-449, September.
    10. José Ángel Zúñiga-Vicente & César Alonso-Borrego & Francisco J. Forcadell & José I. Galán, 2014. "Assessing The Effect Of Public Subsidies On Firm R&D Investment: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 36-67, February.
    11. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    12. Aschhoff, Birgit, 2009. "The effect of subsidies on R&D investment and success: do subsidy history and size matter?," ZEW Discussion Papers 09-032, ZEW - Leibniz Centre for European Economic Research.
    13. 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, July.
    14. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    15. Francis J Greene, 2009. "Assessing the impact of policy interventions: the influence of evaluation methodology," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 27(2), pages 216-229, April.
    16. Clarysse, Bart & Wright, Mike & Mustar, Philippe, 2009. "Behavioural additionality of R&D subsidies: A learning perspective," Research Policy, Elsevier, vol. 38(10), pages 1517-1533, December.
    17. T. D. Stanley, 2008. "Meta‐Regression Methods for Detecting and Estimating Empirical Effects in the Presence of Publication Selection," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 103-127, February.
    18. Özçelik, Emre & Taymaz, Erol, 2008. "R&D support programs in developing countries: The Turkish experience," Research Policy, Elsevier, vol. 37(2), pages 258-275, March.
    19. Reinhard Hujer & Dubravko Radić, 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, September.
    20. Hristos Doucouliagos & T. D. Stanley, 2009. "Publication Selection Bias in Minimum‐Wage Research? A Meta‐Regression Analysis," British Journal of Industrial Relations, London School of Economics, vol. 47(2), pages 406-428, June.
    21. 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.
    22. Stanley, T. D. & Jarrell, Stephen B. & Doucouliagos, Hristos, 2010. "Could It Be Better to Discard 90% of the Data? A Statistical Paradox," The American Statistician, American Statistical Association, vol. 64(1), pages 70-77.
    23. Hud, Martin & Hussinger, Katrin, 2015. "The impact of R&D subsidies during the crisis," Research Policy, Elsevier, vol. 44(10), pages 1844-1855.
    24. Clausen, Tommy H., 2009. "Do subsidies have positive impacts on R&D and innovation activities at the firm level?," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 239-253, December.
    25. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, July.
    26. Hujer, Reinhard & Radić, Dubravko, 2005. "Evaluating the Impacts of Subsidies on Innovation Activities in Germany," ZEW Discussion Papers 05-43, ZEW - Leibniz Centre for European Economic Research.
    27. Chris Doucouliagos & T.D. Stanley, 2013. "Are All Economic Facts Greatly Exaggerated? Theory Competition And Selectivity," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 316-339, April.
    28. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297-297.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:45:y:2016:i:4:p:797-815. See general 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: (Haili He). General contact details of provider: http://www.elsevier.com/locate/respol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.