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Public funds additionality in R & D expenditure in presence of essential heterogeneity: An empirical investigation using the Italian CIS3 data

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  • Gianluca Papa

Abstract

This paper undertakes an empirical estimation of the additionality of public funding on both the propensity to initiate R & D activity and the intensity of R & D spending of Italian enterprises for the period 1998-2000, using data from the Third Community Innovation Survey and from firms' financial accounts. The chosen methodology (Endogenous Switching Type II-Tobit) takes into account the possibility that decisions about both starting an R & D activity (sample selection effect) and applying for/obtaining public funding (essential heterogeneity) are influenced by private knowledge of enterprises' idiosyncratic propensities in R & D spending. The present analysis shows that both these effects are indeed important and that they contribute to explain most of the additionality found with less sophisticated models. Copyright © 2012 Inderscience Enterprises Ltd.

Suggested Citation

  • Gianluca Papa, 2012. "Public funds additionality in R & D expenditure in presence of essential heterogeneity: An empirical investigation using the Italian CIS3 data," ULB Institutional Repository 2013/184429, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/184429
    Note: SCOPUS: re.j
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