Office of the RS for Macroeconomic Analysis and Development, Ljubljana (URSMAR)
13.
The quest for more efficient R & D subsidies : examining dynamic effects
Burger, Anže, 1979- ; Jaklič, Andreja, 1968- ; Rojec, Matija
We study the dynamic effects of research and development (R & D) subsidies on private R & D spending in Slovenia and examine the changes in corporate R & D spending behavior due to R & D subsidies by ...applying propensity score matching methodology. Taking the difference-indifferences approach, we evaluate how much the supported firm would have spent on R & D if it had not received the subsidy. The results confirm the complementary effect of public subsidies to private R & D spending and prove R & D subsidies as an influential variable for private R & D spending increase. The results also point to tree sources of subsidized firms` heterogeneity that have significant effects on the scope of R & D subsidies: (1) the larger the previous private R & D spending of firms, the smaller the increase in current R & D spending of subsidized firms; (2) the larger the sales, the higher the increase in private R & D spending of subsidized firms; and (3) the effect of R & D subsidies decreases with persistency of subsidizing. Firms that received subsidies more than twice previously increased their R & D expenditures slower than nonsubsidized and less frequently subsidized firms.
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