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R&D subsidies and private R&D expenditures: evidence from Italian manufacturing data

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  • Oliviero Carboni

Abstract

This paper uses a comprehensive firm level data set for the manufacturing sector in Italy to investigate the effect of government support on privately financed R&D expenditure. Estimates from a non-parametric matching procedure suggest that public assistance has a positive effect on private R&D investment in the sense that the recipient firms achieve more private R&D than they would have without public support. This indicates that the possibility of perfect crowding out between private and public funds can be rejected. Furthermore, in this sample of Italian firms, tax incentives appear to be more effective than direct grants. The paper also examines whether public funding affects the financial sources available for R&D and finds that grants encourage the use of internal sources. The results also show some evidence of positive effects on credit financing for R&D.

Suggested Citation

  • Oliviero Carboni, 2011. "R&D subsidies and private R&D expenditures: evidence from Italian manufacturing data," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(4), pages 419-439.
  • Handle: RePEc:taf:irapec:v:25:y:2011:i:4:p:419-439
    DOI: 10.1080/02692171.2010.529427
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    References listed on IDEAS

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    1. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    2. Aerts, Kris & Czarnitzki, Dirk, 2004. "Using Innovation Survey Data to Evaluate R&D Policy: The Case of Belgium," ZEW Discussion Papers 04-55, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. 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.
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    Citations

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    Cited by:

    1. repec:oup:indcch:v:25:y:2016:i:6:p:955-975. is not listed on IDEAS
    2. Tim Buyse & Freddy Heylen & Ruben Schoonackers, 2015. "On The Role Of Public Policies And Wage Formation For Private Investment In R&D: A Long-Run Panel Analysis," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 15/911, Ghent University, Faculty of Economics and Business Administration.
    3. Oliviero A. Carboni, 2013. "A spatial analysis of R&D: the role of industry proximity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(8), pages 820-839, November.
    4. OA Carboni & G. Medda, 2016. "R&D, Export, and Investment Decision," Working Paper CRENoS 201605, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    5. Bettina Becker, 2015. "Public R&D Policies And Private R&D Investment: A Survey Of The Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 917-942, December.
    6. Carboni, Oliviero A., 2017. "The effect of public support on investment and R&D: An empirical evaluation on European manufacturing firms," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 282-295.
    7. repec:eee:chieco:v:46:y:2017:i:s:p:s50-s64 is not listed on IDEAS
    8. Aristei, David & Sterlacchini, Alessandro & Venturini, Francesco, 2015. "The effects of public supports on business R&D: firm-level evidence across EU countries," MPRA Paper 64611, University Library of Munich, Germany.
    9. 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.
    10. Álvarez, Inmaculada C. & Kao, Chihwa & Romero-Jordán, Desiderio, 2016. "Long run effect of public grants on the R&D investment: A non-stationary panel data approach," Efficiency Series Papers 2016/04, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    11. Huergo, Elena & Trenado, Mayte & Ubierna, Andrés, 2016. "The impact of public support on firm propensity to engage in R&D: Spanish experience," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 206-219.
    12. repec:cmn:journl:y:2017:i:2:p:79-95 is not listed on IDEAS
    13. Paola Brighi & Roberto Patuelli & Giuseppe Torluccio, 2012. "Self-Financing of Traditional and R&D Investments: Evidence from Italian SMEs," Working Paper series 61_12, Rimini Centre for Economic Analysis.
    14. Sergio Afcha & Jose García-Quevedo, 2016. "The impact of R&D subsidies on R&D employment composition," Industrial and Corporate Change, Oxford University Press, vol. 25(6), pages 955-975.
    15. Carboni, Oliviero A., 2013. "Heterogeneity in R&D collaboration: An empirical investigation," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 48-59.
    16. repec:eee:respol:v:46:y:2017:i:6:p:1118-1132 is not listed on IDEAS

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