Estimating the local average treatment effect of R&D subsidies in a pan-European program

Arbeitspapier

We investigate the effect of Europe's largest multilateral subsidy program for R&D-performing, small and medium-sized enterprises on firm growth. The program was organized under a specific budget allocation rule, referred to as Virtual Common Pot (VCP), which is designed to avoid cross-subsidization between participating countries. This rule creates exogenous variation in treatment status and allows us to identify the local average treatment effect of public R&D grants. In addition, we compare the program's effect under the VCP rule with the standard situation of a Real Common Pot (RCP), where program authorities allocate a single budget according to uniform project evaluation criteria. Our estimates suggest no average effect of grants on firm growth but treatment effects are heterogeneous and increase with project quality. A Real Common Pot would have reduced the cost of policy-induced job creation by 27%. We discuss the implications of our findings for the coordination of national policy programs within the European Research Area.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ZEW Discussion Papers ; No. 16-039

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Technological Change: Government Policy ; Business Taxes and Subsidies including sales and value-added (VAT) ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
• Thema: Joint Programming Iniatives ; R&D Policy ; Virtual Common Pot ; Instrumental Variable Estimation ; European Research Area

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hünermund, Paul ; Czarnitzki, Dirk
• Ereignis: Veröffentlichung
• (wer): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (wo): Mannheim
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/140627
• URN: urn:nbn:de:bsz:180-madoc-411061
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ