Document type
Working paperPublication date
Publication license
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/116557
The link between public support and private R&D effort: what is the optimal subsidy?
Journal Title
Director/Tutor
Journal ISSN
Volume Title
Related resource
Abstract
The effectiveness of R&D subsidies can vary substantially depending on their characteristics. Specifically, the amount and intensity of such subsidies are crucial issues in the design of public schemes supporting private R&D. Public agencies determine the intensities of R&D subsidies for firms in line with their eligibility criteria, although assessing the effects of R&D projects accurately is far from straightforward. The main aim of this paper is to examine whether there is an optimal intensity for R&D subsidies through an analysis of their impact on private R&D effort. We examine the decisions of a public agency to grant subsidies taking into account not only the characteristics of the firms but also, as few previous studies have done to date, those of the R&D projects. In determining the optimal subsidy we use both parametric and non-parametric techniques. The results show a non-linear relationship between the percentage of subsidy received and the firms’ R&D effort. These results have implications for Technology policy, particularly for the design of R&D subsidies that ensure enhanced effectiveness.
Subject (English)
Citation
Citation
DUCH BROWN, Néstor, GARCIA-QUEVEDO, Jose and MONTOLIO, Daniel. The link between public support and private R&D effort: what is the optimal subsidy?. IEB Working Paper 2011/12. [consulted: 11 of August of 2026]. Available at: https://hdl.handle.net/2445/116557