Evaluating innovation policy: a structural treatment effect model of R&D subsidies

Arbeitspapier

This paper studies the welfare effects of R&D subsidies. We develop a model of continuous optimal treatment with outcome heterogeneity where the treatment outcome depends on applicant investment. The model takes into account heterogeneous application costs and identifies the treatment effect on the public agency running the programme. Under the assumption of a welfare-maximizing agency, we identify general equilibrium treatment effects. Applyiing our model to R&D project-level data we find substantial treatment effect heterogeneity. Agency-specific treatment effects are smaller than private treatment effects. We find that the rate of return on subsidies for the agency is 30-50%.

Object Details

• ISBN: 978-952-462-431-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Finland Research Discussion Papers ; No. 7/2008

Classification and Topics

• Classification: Wirtschaft ; Technological Change: Government Policy ; Innovation and Invention: Processes and Incentives ; Enterprise Policy ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
• Subject: applications ; effort ; investment ; R&D ; selection ; subsidies ; treatment programme ; treatment effects ; welfare

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Takalo, Tuomas ; Tanayama, Tanja ; Toivanen, Otto
• Event: Veröffentlichung
• (who): Bank of Finland
• (where): Helsinki
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/212098
• Last update: 10.03.2025, 11:42 AM CET