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R&D Policies in France: New Evidence from a NUTS3 Spatial Analysis

Benjamin Montmartin, Marcos Herrera () and Nadine Massard ()

No 2015-26, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis

Abstract: The French policy-mix for R&D and innovation has deeply evolved in recent years and is nowadays, one of the most generous and market-friendly system in the world. This paper investigates the (evolutive) effects of this policy-mix by using a unique database containing information on the amount of R&D tax credit, regional, national and European subsidies received by firms in all French metropolitan NUTS3 regions over the period 2001-2011. By estimating a Spatial Durbin model with regimes and fixed effects, we provide new evidence on the efficiency of the French policy-mix. First, a yardstick competition between NUTS3 regions for R&D investment driven by negative spatial spillovers is found. Second, it seems that national subsidies are the only instrument able to generate a significant leverage effect on privately-financed R&D. Third, due to the context of spatial competition, the three other policies studied (Tax Credit, Regional and European subsidies) do not generate significant leverage or crowding-out effect. Fourth, we highlight the presence of structural breaks in our data that correspond to the last two important reforms of the French tax credit. Consequently, the effect of R&D policies and especially R&D tax credit are likely to change over time and influence ex-post evaluation results.

Keywords: Additionality; French policy-mix; Private R&D investment; Spatial panel (search for similar items in EconPapers)
JEL-codes: H25 O31 O38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eur, nep-geo, nep-ino, nep-sbm and nep-tid
Date: 2015-07
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http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2015-26.pdf First version, 2015 (application/pdf)

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Working Paper: R&D policies in France: New evidence from a NUTS3 spatial analysis (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2015-26

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