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Are firms that receive R&D subsidies more innovative?

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  • Charles Bérubé
  • Pierre Mohnen

Abstract

This paper looks at the effectiveness of R&D grants for Canadian plants that already benefit from R&D tax credits. Using a non‐parametric matching estimator and data from the 2005 Survey of Innovation from Statistics Canada, we find that firms that benefited from both policy measures introduced more new products than their counterparts that only benefited from R&D tax incentives. They also made more world‐first product innovations and were more successful in commercializing their innovations. The paper gives also a detailed step‐by‐step explanation of how to apply the non‐parametric matching technique. Cette étude examine l'efficacité des subventions à la recherche‐développement pour les établissements canadiens qui bénéficient déjà de crédits d'impôt à la recherche. En utilisant un estimateur non‐paramétrique d'appariement, nous trouvons que les établissements qui bénéficient des deux mesures de soutien à la recherche introduisent plus de nouveaux produits sur le marché que celles qui ne bénéficient que des crédits d'impôt. Elles réussissent aussi à mettre plus de premières mondiales sur le marché et à mieux commercialiser leurs nouveaux produits. Nous exposons aussi en détail les étapes à suivre pour une estimation non‐paramétrique d'appariement.

Suggested Citation

  • Charles Bérubé & Pierre Mohnen, 2009. "Are firms that receive R&D subsidies more innovative?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(1), pages 206-225, February.
    • Handle: RePEc:wly:canjec:v:42:y:2009:i:1:p:206-225
    DOI: 10.1111/j.1540-5982.2008.01505.x
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    References listed on IDEAS

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    1. Bloom, Nick & Griffith, Rachel & Van Reenen, John, 2002. "Do R&D tax credits work? Evidence from a panel of countries 1979-1997," Journal of Public Economics, Elsevier, vol. 85(1), pages 1-31, July.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    3. Czarnitzki, Dirk & Hanel, Petr & Rosa, Julio Miguel, 2011. "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms," Research Policy, Elsevier, vol. 40(2), pages 217-229, March.
    4. 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.
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    9. Dagenais, Marcel & Mohnen, Pierre & Therrien, Pierre, 2004. "Les firmes canadiennes répondent-elles aux incitations fiscales à la recherche-développement?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(2), pages 175-205, Juin-Sept.
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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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