Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure

Abstract

International audienceThis study analyzes the effect of public R&D subsidies on private R&D expenditure in a sample of French firms during the period 1993–2009. We evaluate whether there is any input additionality of public R&D subsidies by distinguishing between R&D tax credit recipient and non-recipient firms. In addition, combining difference-in-differences with propensity score and exact (both simple and categorical) matching methods, we assess the effect of R&D subsidies between treated (subsidy recipients) and controls (subsidy non-recipients) as well as between differently treated (small, medium and large subsidy recipient) firms. Furthermore, we implement a dose–response matching approach to determine the optimality of public R&D subsidy provisions. We find evidence of either no additionality or substitution effects between public and private R&D expenditure. Crowding-out effects appear to be more pronounced for medium-high levels of public subsidies, and generally under the R&D tax credit regime. A number of robustness checks corroborate our main findings

The impact of the French policy mix on business R&D: How geography matters

“…In line with the results provided by Lokshin and Mohnen [35] or Marino et al [36], we find a strong negative change in the impact of tax credits on R&D investment between the first period (2002)(2003)(2004)(2005) and the second (2006)(2007)(2008)(2009)(2010)(2011). This corroborates the idea that a purely volume-based scheme generates more windfall effects than an incremental scheme.…”

“…Mohnen [35] or Marino et al [36]. The global neutral effect of tax credits is also explained by the presence of a significant negative indirect effect that counterbalances the positive direct effect.…”

“…Marino et al [36] analyze the impacts of subsidies in the presence or absence of a tax credit regime for the French case. They show that crowding-out effects appear to be more pronounced under the R&D tax credit regime.…”

Uma avaliação da Lei de Informática e seus impactos sobre os gastos empresariais em P&D nos anos 2000

“…Em estudo recente com dados da Noruega, Itália e França, Bodas Freitas et al (2017) encontraram efeitos de adicionalidade para as empresas localizadas em setores em que a P&D constitui estratégia predominante de inovação das empresas, sobretudo naqueles baseados em ciência, seguindo a taxonomia de Pavitt (1984). Marino et al (2016) utilizaram dados para uma amostra de empresas francesas entre 1993 e 2009, combinando os métodos de DID com propensity score. Diferenciando-se da maioria das abordagens anteriores, este estudo simulou testes com diferentes dosagens de tratamento a fim de encontrar se há uma quantidade ótima de incentivos que leva à adicionalidade.…”

Innovation subsidy under duopoly

“…Leibowicz (2018) found that subsidies improve innovation with stronger spillovers and moderately costly research and development to a great degree. Marino, Lhuillery, Parrotta, and Sala (2016) identified the crowding out effects of public research and development subsidies on private firms. Buchmann and Kaiser (2019) checked German biotech industry and found that subsidy increases the number of patents.…”