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Incorporating innovation subsidies in the CDM framework: Empirical evidence from Belgium

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  • Dirk Czarnitzki
  • Julie Delanote

Abstract

This paper integrates innovation input and output effects of R&D subsidies into a modified Crépon–Duguet–Mairesse (CDM) model. Our results largely confirm insights of the input additionality literature, i.e. public subsidies complement private R&D investment. In addition, results point to positive output effects of both purely privately funded and subsidy–induced R&D. Furthermore, we do not find evidence of a premium or discount of subsidy–induced R&D in terms of its marginal contribution on new product sales when compared to purely privately financed R&D.

Suggested Citation

  • Dirk Czarnitzki & Julie Delanote, 2016. "Incorporating innovation subsidies in the CDM framework: Empirical evidence from Belgium," Working Papers of ECOOM - Centre for Research and Development Monitoring 543966, KU Leuven, Faculty of Economics and Business (FEB), ECOOM - Centre for Research and Development Monitoring.
  • Handle: RePEc:ete:ecoomp:543966
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    References listed on IDEAS

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    Cited by:

    1. Thomas H. W. Ziesemer, 2021. "The Effects of R&D Subsidies and Publicly Performed R&D on Business R&D: A Survey," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 171-205, March.
    2. Audretsch, David & Hafenstein, Marian & Kritikos, Alexander S. & Schiersch, Alexander, 2018. "Firm Size and Innovation in the Service Sector," IZA Discussion Papers 12035, Institute of Labor Economics (IZA).
    3. Isabel Bodas Freitas & Fulvio Castellacci & Roberto Fontana & Franco Malerba & Andrea Vezzulli, 2015. "The additionality effects of R&D tax credits across sectors: A cross-country microeconometric analysis," Working Papers on Innovation Studies 20150424, Centre for Technology, Innovation and Culture, University of Oslo.
    4. Wanshu Wu & Kai Zhao & Lei Li, 2021. "Can government subsidy strategies and strategy combinations effectively stimulate enterprise innovation? Theory and evidence," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 423-446, July.

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    More about this item

    Keywords

    CDM model; R&D; subsidies; innovation policy;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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