This study analyzes the effects of public R&D policy schemes on the innovation activities of firms located in Eastern Germany. The main question in this context is whether public funds stimulate R&D activities or simply crowd out privately financed R&D. Empirically, we investigate the average causal effects of all public R&D schemes in Eastern Germany using a non?parametric matching approach. Compared to the case where no public financial means are provided, it turns out that firms increase their innovation activities by about four percentage points.
Public Innovation Subsidies Non?parametric Matching