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The Impact of Public Support Intensity on Business R&D: Evidence from a Dose-Response Approach

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  • Giovanni Cerulli
  • Bianca Potì

Abstract

This paper presents an original econometric model for estimating a dose-response function through a regression approach when: (i) treatment is continuous, (ii) individuals may react heterogeneously to observable confounders, and (iii) selection-into-treatment may be potentially endogenous. After describing the model, two estimation procedures are suggested: one based on OLS under Conditional Mean Independence (or CMI), and one based on Instrumental-Variables (IV) under selection endogeneity. The paper goes on by presenting ctreatreg, a user-written Stata routine for an easy implementation of such a model, thereby performing a Monte Carlo experiment to test the reliability of the model and of its software implementation. Finally, an application to real data for assessing the effect of public R&D support on companies' R&D expenditure is presented and results briefly commented. The usefulness of such a model for program evaluation is clearly stressed.

Suggested Citation

  • Giovanni Cerulli & Bianca Potì, 2014. "The Impact of Public Support Intensity on Business R&D: Evidence from a Dose-Response Approach," ERSA conference papers ersa14p625, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p625
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    2. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.

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    More about this item

    Keywords

    treatment effects; dose-response function; continuous treatment; Monte Carlo; R&D support;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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