Misappropriation of R&D subsidies: Estimating treatment effects with one-sided noncompliance

Philipp Boeing and Bettina Peters ()

No 21-081, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We investigate the misappropriation of R&D subsidies and evaluate its consequences for policy effectiveness. Using Chinese firm-level data for 2001-2011, we identify that 42% of grantees misused R&D subsidies, accounting for 53% of total R&D subsidies. Misappropriation leads to a substantial loss of the causal impact of R&D subsidies, as measured by the difference of the intention-to-treat effect and complier average causal effect. Results show that R&D expenditures could have been stimulated beyond the subsidy amount (additionality), but noncompliance has resulted in medium-level partial crowding out. Overall, misappropriation has reduced the effectiveness of China’s R&D policy by more than half.

Keywords: R&D subsidies; policy evaluation; misappropriation; China (search for similar items in EconPapers)
JEL-codes: C21 H21 O31 O38 (search for similar items in EconPapers)
Date: 2022, Revised 2022
New Economics Papers: this item is included in nep-cna, nep-ino, nep-sbm and nep-tid
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Related works:
Working Paper: Misappropriation of R&D Subsidies: Estimating Treatment Effects with One-Sided Noncompliance (2021)
Working Paper: Misappropriation of R&D Subsidies: Estimating Treatment Effects with One-sided Noncompliance (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:21081

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