The link between public support and private r&d effort: what is the optimal subsidy?
By Néstor Duch-Brown, J. García‐Quevedo, Daniel Montolio. 2011
197 citations recorded by the source corpus.
The effectiveness of R&D subsidies can vary substantially depending on their characteristics. Specifically, the amount and intensity of such subsidies are crucial issues in the design of public schemes supporting private R&D. Public agencies determine the intensities of R&D subsidies for firms in line with their eligibility criteria, although assessing the effects of R&D projects accurately is far from straightforward. The main aim of this paper is to examine whether there is an optimal intensity for R&D subsidies through an analysis of their impact on private R&D effort. We examine the decisions of a public agency to grant subsidies taking into account not only the characteristics of the firms but also, as few previous studies have done to date, those of the R&D projects. In determining the optimal subsidy we use both parametric and nonparametric techniques. The results show a non-linear relationship between the percentage of subsidy received and the firms’ R&D effort. These results have implications for technology policy, particularly for the design of R&D subsidies that ensure enhanced effectiveness.
Subfields: Economics and Econometrics, Mechanical Engineering
View Paper: https://www.semanticscholar.org/paper/dcd0fd3e65390e2eac0904cb308ca421690e5665
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