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The Impact of Public Funding on Private R&D investment. New Evidence from a Firm Level Innovation Study  (Additionality or Crowding Out? On the effectiveness of R&D subsidies)
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Economics.ORCID iD: 0000-0002-5871-8571
2004 (English)Report (Other academic)
Abstract [en]

This paper investigates the effectiveness of a public innovation policy aimed at stimulating private R&D investment. The research will examine whether public funding increases the total spending on research or merely displaces funding from private sources. The empirical analysis is based on the Community Innovation Survey data merged with register data. It is an evaluation of whether firms receiving public funds have on average a higher R&D intensity compared to those not receiving any such support. In order to account for possible selectivity bias, and to improve comparability of firms, two different versions of a sem -parametric matching approach are employed. The two matching estimators result in somewhat different results. The Nearest Neighbour estimator is preferred to the Kernel estimator. The results support the hypothesis suggesting that there are additive effects of public R&D financing on private research expenditures only for small firms.

Place, publisher, year, edition, pages
CECIS, KTH Royal Institute of Technology , 2004. , 26 p.
CESIS Working Paper Series in Economics and Institutions of Innovation, 06
Keyword [en]
R&D investment, crowding out, public funding, matching, subsidies
National Category
URN: urn:nbn:se:kth:diva-72434OAI: diva2:487582
QC 20120208Available from: 2012-02-08 Created: 2012-01-31 Last updated: 2012-02-08Bibliographically approved

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