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R&D Policies in France: New Evidence from a NUTS3 Spatial Analysis

Author

Listed:
  • Benjamin Montmartin

    (GREDEG CNRS
    University of Nice-Sophia Antipolis, France)

  • Marcos Herrera

    (CONICET - IELDE
    National University of Salta, Argentina)

  • Nadine Massard

    (GAEL UMR 1215
    Université Grenoble Alpes, France)

Abstract

The French policy-mix for R&D and innovation has deeply evolved in recent years and is nowadays, one of the most generous and market-friendly system in the world. This paper investigates the (evolutive) effects of this policy-mix by using a unique database containing information on the amount of R&D tax credit, regional, national and European subsidies received by firms in all French metropolitan NUTS3 regions over the period 2001-2011. By estimating a Spatial Durbin model with regimes and fixed effects, we provide new evidence on the efficiency of the French policy-mix. First, a yardstick competition between NUTS3 regions for R&D investment driven by negative spatial spillovers is found. Second, it seems that national subsidies are the only instrument able to generate a significant leverage effect on privately-financed R&D. Third, due to the context of spatial competition, the three other policies studied (Tax Credit, Regional and European subsidies) do not generate significant leverage or crowding-out effect. Fourth, we highlight the presence of structural breaks in our data that correspond to the last two important reforms of the French tax credit. Consequently, the effect of R&D policies and especially R&D tax credit are likely to change over time and influence ex-post evaluation results.

Suggested Citation

  • Benjamin Montmartin & Marcos Herrera & Nadine Massard, 2015. "R&D Policies in France: New Evidence from a NUTS3 Spatial Analysis," GREDEG Working Papers 2015-26, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
  • Handle: RePEc:gre:wpaper:2015-26
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    References listed on IDEAS

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    1. Simachev, Y. & Kuzyk, M. & Zudin, N., 2017. "The Impact of Public Funding and Tax Incentives on Russian Firms: Additionality Effects Evaluation," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 59-93.

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    More about this item

    Keywords

    Additionality; French policy-mix; Private R&D investment; Spatial panel;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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