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Are R&D subsidies a substitute or a complement to privately funded R&D? Evidence from France using propensity score methods for non- experimental data

Emmanuel Duguet ()

Public Economics from University Library of Munich, Germany

Abstract: This study examines the effect of research and development subsidies on the private funding of R&D in France. We address this issue from the annual R&D survey over 1985-1997, which provides information about the R&D subsidies given by all the ministries to the firms having at least one full-time person working on R&D. In order to determine whether the supported firms would have invested the same amount of private R&D without the subsidies, we use matching methods. We show that the use of these methods is important because the global evaluations, in this paper, more often give a potential effect among the non-supported firms than a real effect among the supported firms. We first study the probability to get a subsidy. We find that this probability is increasing with size, the debt ratio and the importance of privately funded R&D. In a second step, controlling for the past public support the firms benefited from, we find that, on average, public funds add to private funds, so that there would be no significant crowding out effect.

Keywords: propensity score; non-experimental data; policy evaluation; research and development; subsidies (search for similar items in EconPapers)
JEL-codes: C14 H25 L98 O38 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2004-11-16
New Economics Papers: this item is included in nep-ino
Note: Type of Document - pdf; pages: 38
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0411007

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