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The Link Between R&D Subsidies, R&D Spending and Technological Performance

Author

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  • Czarnitzki, Dirk
  • Hussinger, Katrin

Abstract

This paper analyzes the effects of public R&D funding on R&D expenditure and patenting behavior of German firms. The main focus is the direct impact of subsidies on R&D and the indirect effect on innovation output measured by patent applications. We distinguish the productivity of purely privately financed R&D and additional R&D induced by public incentive schemes. For this, a treatment effects analysis is conducted in a first step. The results are implemented into the estimation of a patent production function. It turns out that both purely privately financed R&D and publicly induced R&D show a positive productivity.

Suggested Citation

  • Czarnitzki, Dirk & Hussinger, Katrin, 2004. "The Link Between R&D Subsidies, R&D Spending and Technological Performance," ZEW Discussion Papers 04-56, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:2194
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    File URL: https://www.econstor.eu/bitstream/10419/24065/1/dp0456.pdf
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    References listed on IDEAS

    as
    1. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    2. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, pages 930-949.
    3. repec:fth:harver:1473 is not listed on IDEAS
    4. Ariél Pakes & Zvi Griliches, 1984. "Estimating Distributed Lags in Short Panels with an Application to the Specification of Depreciation Patterns and Capital Stock Constructs," Review of Economic Studies, Oxford University Press, vol. 51(2), pages 243-262.
    5. Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, pages 1661-1707.
    6. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
    7. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    8. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, pages 930-949.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    R&D; Subsidies; Patents; Treatment Effects;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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