Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248851 
Year of Publication: 
2021
Series/Report no.: 
ZEW Discussion Papers No. 21-097
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We analyze the impact of subsidies on R&D expenditures in the financial crisis and beyond. The financial crisis has led to considerable turmoil in financing and, as a result, to restrictions of firms' access to external financing. Utilizing this fact, we identify and analyze financing constraints in two ways. First, firm financing constraints are determined via their credit rating and second, restrictions from the supply side are identified via the firm's main banks capital reserves. The results of our empirical test imply that R&D investments of non-subsidized firms decrease during the crisis. This effect is particularly pronounced for firms that are affected by financing constraints on the firm or bank side. Finally, our results imply that subsidies can at least partially compensate for these negative effects.
Subjects: 
R&D investment
financing constraints
financial crisis
R&D subsidies
JEL: 
G01
G21
G24
G30
O16
O30
O31
O32
Document Type: 
Working Paper

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