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Evaluation of public R&D policies: A cross-country comparison

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  • Czarnitzki, Dirk
  • Lopes Bento, Cindy

Abstract

This study focuses on the effect of public funding on internal R&D investment and on total innovation intensity on a cross-country comparative level. Using harmonised micro data from five different countries, this study analyzes the heterogeneity of the use of policy instruments. Applying a nonparametric matching method to identify the treatment effect, we find that on average firms would have invested significantly less if they would not have received subsidies. On similar grounds, our estimation also takes into account the 'treatment effects on the untreated'. This estimation enables us to assess whether or not governments could further foster R&D activities by extending innovation policies to currently not supported firms. With the exception of one country, all the governments of the sample would benefit from an extension of their subsidy policies. Finally, these two matching results can be combined in order to test for misallocation of public funds. Our analysis does not uncover any systematic misallocation of public funding for the countries under review.

Suggested Citation

  • Czarnitzki, Dirk & Lopes Bento, Cindy, 2010. "Evaluation of public R&D policies: A cross-country comparison," ZEW Discussion Papers 10-073, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:10073
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    References listed on IDEAS

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    1. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, pages 930-949.
    2. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, pages 930-949.
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    Cited by:

    1. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2015. "UK and EU subsidies and private R&D investment: Is there input additionality?," MPRA Paper 68009, University Library of Munich, Germany, revised 16 Nov 2015.
    2. Silva Filipe & Carreira Carlos, 2017. "Financial Constraints: Do They Matter to Allocate R&D Subsidies?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, pages 1-26.
    3. Dirk Czarnitzki & Cindy Lopes-Bento, 2014. "Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany," Industry and Innovation, Taylor & Francis Journals, pages 380-409.
    4. LOPES BENTO Cindy & CZARNITZKI Dirk, 2012. "Value for money? New microeconomic evidence on public R&D grants in Flanders," LISER Working Paper Series 2012-19, LISER.
    5. Reiljan, Janno & Paltser, Ingra, 2013. "The implementation of research and development policy in European and Asian countries," Discourses in Social Market Economy 2013-03, OrdnungsPolitisches Portal (OPO).
    6. BIA Michela & FLORES Carlos A. & MATTEI Alessandra, 2011. "Nonparametric Estimators of Dose-Response Functions," LISER Working Paper Series 2011-40, LISER.
    7. Peroni, Chiara & Gomes Ferreira, Ivete, 2010. "Market competition and innovation in Luxembourg," MPRA Paper 38709, University Library of Munich, Germany.
    8. Hottenrott, Hanna & Lopes-Bento, Cindy, 2014. "(International) R&D collaboration and SMEs: The effectiveness of targeted public R&D support schemes," Research Policy, Elsevier, pages 1055-1066.
    9. Alberto A. Gaggero & Claudio A. Piga, 2011. "Airline Market Power and Intertemporal Price Dispersion," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 552-577, December.
    10. Ensthaler, Ludwig & Giebe, Thomas, 2014. "A dynamic auction for multi-object procurement under a hard budget constraint," Research Policy, Elsevier, pages 179-189.
    11. Paola Brighi & Roberto Patuelli & Giuseppe Torluccio, 2012. "Self-Financing of Traditional and R&D Investments: Evidence from Italian SMEs," Working Paper series 61_12, Rimini Centre for Economic Analysis.
    12. Czarnitzki, Dirk & Lopes-Bento, Cindy, 2013. "Value for money? New microeconometric evidence on public R&D grants in Flanders," Research Policy, Elsevier, pages 76-89.
    13. Czarnitzki, Dirk & Lopes-Bento, Cindy, 2013. "Value for money? New microeconometric evidence on public R&D grants in Flanders," Research Policy, Elsevier, pages 76-89.
    14. Spyros Arvanitis, 2013. "Micro-econometric approaches to the evaluation of technology-oriented public programmes: a non-technical review of the state of the art," Chapters,in: Handbook on the Theory and Practice of Program Evaluation, chapter 3, pages 56-88 Edward Elgar Publishing.
    15. Hud, Martin & Hussinger, Katrin, 2015. "The impact of R&D subsidies during the crisis," Research Policy, Elsevier, pages 1844-1855.
    16. Ensthaler, Ludwig & Giebe, Thomas, 2014. "A dynamic auction for multi-object procurement under a hard budget constraint," Research Policy, Elsevier, pages 179-189.
    17. repec:eee:respol:v:46:y:2017:i:6:p:1142-1161 is not listed on IDEAS

    More about this item

    Keywords

    Innovation; Policy Evaluation; Treatment Effects; Cross-country comparison;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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