Two for the price of one? On additionality effects of R&D subsidies: A comparison between Flanders and Germany

By Kris Aerts, Tobias Schmidt. 2006

207 citations recorded by the source corpus.

In this paper we empirically test whether public R&D subsidies crowd out private R&D investment in Flanders and Germany, using firm level data from the Flemish and German part of the Community Innovation survey (CIS III and IV). Both the non-parametric matching estimator and the conditional difference-in-difference estimator with repeated cross-sections (CDiDRCS) clearly indicate that the crowding-out hypothesis can be rejected: funded firms are significantly more R&D active than non-funded firms. In the domain of additionality effects of R&D subsidies, this paper is the first to apply the CDiDRCS method.

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Citations in the corpus

Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure (2016, background): “The Rand Journal of Economics, 36(4), 930-950.”
Subsidies, financial constraints and firm innovative activities in emerging economies (2017, background): “2007) and Flanders and Germany (Aerts and Schmidt 2008; Czarnitzki and Lopes-Bento 2013, 2014; Hottenrott and Lopes-Bento 2014). Panel data studies generally find some crowding in effects. For instance, Lach (2002) reports substantial stimulation of the own R&D spending of small Israeli firms. Girma”
Using Innovation Surveys for Econometric Analysis (2010, unknown): “Most studies conclude that government R&D support leads to additional private R&D, innovation expenditures or innovation outputs and not to crowding out of private R&D by public R&D support (Aerts and Schmidt, 2008; Almus and Czarnitzki, 2003; Bérubé and Mohnen, 2009; Busom, 2000; Czarnitzki and Lic”
Radical or incremental: Where does R&D policy hit?* (2016, unknown): “For other studies using the treatment variable in the same manner, see for instance Aerts and Schmidt (2008); Cerulli and Potì (2012); Czarnitzki and Hussinger (2004); Czarnitzki and Licht (2006); Czarnitzki and Lopes-Bento (2014); Hottenrott and Lopes-Bento (2014a).”
Do financial constraints threat the innovation process? Evidence from Portuguese firms (2011, background): “of public policy, and specifically subsidies, on R&D spending and innovation performance, have been given particular attention in recent years (e.g. Bloom et al., 2002; Almus and Czarnitzki, 2003; Aerts and Schmidt, 2008; Schneider and Veugelers, 2010).”
ASSESSING THE EFFECT OF PUBLIC SUBSIDIES ON FIRM R&D INVESTMENT: A SURVEY (2014, methodology): “The disparity in results can be attributed to differences in the populations under study (time periods, countries of interest, business sectors), the variables used and the empirical approach (see, among others, Capron and Van Pottelsberghe, 1997; David et al., 2000; Garcı́a-Quevedo, 2004; Aerts and”
A Dynamic Model for Construction and Demolition (C (2014, background): “Indeed, funded firms are significantly more R&D-active than non-funded firms [27].”
Government-subsidized R&D and Firm Innovation: Evidence from China (2016, unknown): “…finances more successfully (Lerner, 2000; Aschhoff, 2009), invest more in R&D activities (Audretsch et al., 2002; Lach, 2002; Görg and Strobl, 2007; Aerts and Schmidt, 2008; Czarnitzki and Lopes-Bento, 2013), and generate higher social returns than their counterparts do (Griliches and Regev, 1998;…”
Public R&D Policies and Private R&D Investment: A Survey of the Empirical Evidence (2015, result): “Aerts and Schmidt (2008) provide similar results for firms in Flanders and in Germany, using a conditional difference-in-differences estimator with repeated cross-sections. Employing parametric and semiparametric two-step selection models, Hussinger (2008) further finds evidence of additionality eff”
Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany (2014, background): “…addressing the selection bias include Busom (2000), Wallsten (2000), Lach (2002), Almus and Czarnitzki (2003), Duguet (2004), González, Jaumandreu, and Pazó (2005), Czarnitzki, Ebersberger, and Fier (2007), Aerts and Schmidt (2008), Hussinger (2008) and Czarnitzki and Lopes-Bento (2012, 2013).”