Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104808
Authors: 
Hottenrott, Hanna
Lopes-Bento, Cindy
Veugelers, Reinhilde
Year of Publication: 
2014
Series/Report no.: 
ZEW Discussion Papers 14-107
Abstract: 
This study investigates the effects of an R&D subsidy scheme on participating firms' net R&D investment. Making use of a specific policy design in Belgium that explicitly distinguishes between research and development grants, we estimate direct and cross-scheme effects on research versus development intensities in recipients firms. We find positive direct effects from research (development) subsidies on net research (development) spending. This direct effect is larger for research grants than for development grants. We also find cross-scheme effects that may arise due to complementarity between research and development activities. Finally, we find that the magnitude of the treatment effects depends on firm size and age and that there is a minimum effective grant size, especially for research projects. The results support the view that public subsidies induce higher additional investment particularly in research where market failures are larger, even when the subsidies are targeting development.
Subjects: 
R&D
Complementarity
Research Subsidies
Development Subsidies
Innovation Policy
JEL: 
H23
O31
O38
Document Type: 
Working Paper

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