Estimating the additionality of R&D subsidies using proposal evaluation data to control for firms' R&D intentions
Empirical examination of whether R&D subsidies to private firms crowd out private investments has been hampered by problems related to selection. A particular worry is that research intentions and the quality of current research ideas may be correlated with the likelihood of applying for and receiving subsidies. Proposal evaluation data has been put forward as a potential remedy. Using such data from Norway, we do not find strong evidence suggesting that this type of selection creates a severe bias. Proposal evaluation grades strongly predict R&D investments and reduce selection bias in cross-sectional regressions, but there is limited variation in grades within firms over time. This suggests that unobserved project quality is largely absorbed by firm fixed effects. Our best estimate of the short-run additionality of R&D subsidies is 1.15, i.e., a one-unit increase in subsidy increases total R&D expenditure in the recipient firm by somewhat more than a unit. We demonstrate, however, that there is severe measurement error in the subsidy variable. Additionality is therefore likely to be underestimated, and we conclude that measurement errors may be a more important source of bias than selection when panel data are available.
|Date of creation:||Dec 2012|
|Contact details of provider:|| Postal: P.O.Box 8131 Dep, N-0033 Oslo, Norway|
Phone: (+47) 21 09 00 00
Fax: +47 - 62 88 55 95
Web page: http://www.ssb.no/en/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Adam B. Jaffe, 2002. "Building Programme Evaluation into the Design of Public Research-Support Programmes," Oxford Review of Economic Policy, Oxford University Press, vol. 18(1), pages 22-34, Spring.
- Raffaello Bronzini & Eleonora Iachini, 2014.
"Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach,"
American Economic Journal: Economic Policy,
American Economic Association, vol. 6(4), pages 100-134, November.
- Raffaello Bronzini & Eleonora Iachini, 2011. "Are incentives for R&D effective? Evidence from a regression discontinuity approach," Temi di discussione (Economic working papers) 791, Bank of Italy, Economic Research and International Relations Area.
- Raffaello Bronzini & Eleonora Iachini, 2012. "Are Incentives For R&D Effective? Evidence From A Regression Discontinuity Approach," ERSA conference papers ersa12p848, European Regional Science Association.
- 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, 09.
- Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
- Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Technical Working Papers 0337, National Bureau of Economic Research, Inc.
- Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Working Papers 13039, National Bureau of Economic Research, Inc.
- José Miguel Benavente & Gustavo Crespi & Alessandro Maffioli, 2007. "The Impact of National Research Funds: An Evaluation of the Chilean FONDECYT," OVE Working Papers 0307, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
- Lichtenberg, Frank R, 1984. "The Relationship between Federal Contract R&D and Company R&D," American Economic Review, American Economic Association, vol. 74(2), pages 73-78, May.
- Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
- Jacob, Brian A. & Lefgren, Lars, 2011. "The impact of research grant funding on scientific productivity," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1168-1177, October.
- Brian Jacob & Lars Lefgren, 2007. "The Impact of Research Grant Funding on Scientific Productivity," NBER Working Papers 13519, National Bureau of Economic Research, Inc.
- Jacob, Brian A. & Lefgren, Lars, 2011. "The impact of research grant funding on scientific productivity," Journal of Public Economics, Elsevier, vol. 95(9), pages 1168-1177.
- Daniel Chudnovsky & Andrés López & Martín A. Rossi & Diego Ubfal, 2008. "Money for Science? The Impact of Research Grants on Academic Output," Fiscal Studies, Institute for Fiscal Studies, vol. 29(1), pages 75-87, 03. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ssb:dispap:729. 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: (L MaasÃ¸)
If references are entirely missing, you can add them using this form.