Are Incentives for R&D Effective? Evidence from a Regression Discontinuity Approach

Raffaello Bronzini and Eleonora Iachini

American Economic Journal: Economic Policy, 2014, vol. 6, issue 4, 100-134

Abstract: This paper evaluates a unique R&D subsidy program implemented in northern Italy. Firms were invited to submit proposals for new projects and only those which scored above a certain threshold received the subsidy. We use a sharp regression discontinuity design to compare the investment spending of subsidized firms with that of unsubsidized firms. For the sample as a whole we find no significant increase in investment. This overall effect, however, masks substantial heterogeneity in the program's impact. We estimate that small enterprises increased their investments- by approximately the amount of the subsidy they received- whereas larger firms did not.

JEL-codes: G31 G38 L52 O33 O38 R32 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.4.100
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Citations: View citations in EconPapers (144)

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Related works:
Working Paper: ARE INCENTIVES FOR R&D EFFECTIVE? EVIDENCE FROM A REGRESSION DISCONTINUITY APPROACH (2012)
Working Paper: Are incentives for R&D effective? Evidence from a regression discontinuity approach (2011)
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