Misappropriation of R&D subsidies: Estimating treatment effects with one-sided noncompliance

Arbeitspapier

We investigate the misappropriation of R&D subsidies and evaluate its consequences for policy effectiveness. Using Chinese firm-level data for 2001-2011, we identify that 42% of grantees misused R&D subsidies, accounting for 53% of total R&D subsidies. Misappropriation leads to a substantial loss of the causal impact of R&D subsidies, as measured by the difference of the intention-to-treat effect and complier average causal effect. Results show that R&D expenditures could have been stimulated beyond the subsidy amount (additionality), but noncompliance has resulted in medium-level partial crowding out. Overall, misappropriation has reduced the effectiveness of China’s R&D policy by more than half.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 21-081

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives ; Technological Change: Government Policy ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: R&D subsidies ; policy evaluation ; misappropriation ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Boeing, Philipp ; Peters, Bettina
• Event: Veröffentlichung
• (who): ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
• (where): Mannheim
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/251919
• Last update: 10.03.2025, 11:43 AM CET