Additionality or crowding-out ? An overall evaluation of public R&D subsidy on private R&D expenditure

Marianna Marino, Stephane Lhuillery, Pierpaolo Parrotta and Davide Sala
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Marianna Marino: ICN Business School, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique
Davide Sala: University of Passau, RSBE - Faculty of Economics and Business Administration - University of Siegen = Universität Siegen [Siegen]

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Abstract: This study analyzes the effect of public R&D subsidies on private R&D expenditure in a sample of French firms during the period 1993–2009. We evaluate whether there is any input additionality of public R&D subsidies by distinguishing between R&D tax credit recipient and non-recipient firms. In addition, combining difference-in-differences with propensity score and exact (both simple and categorical) matching methods, we assess the effect of R&D subsidies between treated (subsidy recipients) and controls (subsidy non-recipients) as well as between differently treated (small, medium and large subsidy recipient) firms. Furthermore, we implement a dose–response matching approach to determine the optimality of public R&D subsidy provisions. We find evidence of either no additionality or substitution effects between public and private R&D expenditure. Crowding-out effects appear to be more pronounced for medium-high levels of public subsidies, and generally under the R&D tax credit regime. A number of robustness checks corroborate our main findings.

Keywords: Crowding-out; R&D subsidy; R&D tax credit; Optimal provision of public R&D support (search for similar items in EconPapers)
Date: 2016-11
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Citations: View citations in EconPapers (100)

Published in Research Policy, 2016, 45 (9), pp.1715-1730. ⟨10.1016/j.respol.2016.04.009⟩

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Journal Article: Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01507979

DOI: 10.1016/j.respol.2016.04.009

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