The Effect of R&D Subsidies on Private R&D

Holger Görg and Eric Strobl ()

Economica, 2007, vol. 74, issue 294, 215-234

Abstract: This paper investigates the relationship between government support for R&D and R&D expenditure financed privately by firms using a comprehensive plant level data set for the manufacturing sector in the Republic of Ireland. We find that for domestic plants small grants serve to increase private R&D spending, while too large a grant may crowd out private financing of R&D. In contrast, evidence for foreign establishments suggests that grant provision causes neither additionality nor crowding out effects of private R&D financing, regardless of the size of the subsidy.

Date: 2007
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https://doi.org/10.1111/j.1468-0335.2006.00547.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:74:y:2007:i:294:p:215-234

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