# name
The link between public support and private R&D effort: what is the optimal subsidy?

# metadata.dc.description.abstract[].value
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.

# metadata.dc.rights[].value
cc-by-nc-nd, (c) Duch Brown et al., 2011

# metadata.dc.source[].value
IEB (Institut d’Economia de Barcelona) – Working Papers

# metadata.dc.title[].value
The link between public support and private R&D effort: what is the optimal subsidy?