Working Paper #2010-055
Public R&D subsidies and productivity: Evidence from firm-level data in Quebec
This paper analyses empirically the impacts of public R&D grants on
private R&D investments and on the productivity growth of the
manufacturing firms in a context where fiscal incentives are present.
Using the conditional semiparametric differenceindifferences estimator
on longitudinal data from Quebec we show that firms that use public
grants for R&D in conjunction with tax credits for R&D perform better in
terms of R&D input additionality than firms that use only tax credits
for R&D. We then use a production function to assess the effectiveness
of public R&D grants in the productivity growth of firms. We find that
for each additional dollar of public R&D grant, output increases by
0.134 dollars. We conclude that the additional return of direct
subsidies is positive but lower than the return on the R&D financed by
own funds or R&D tax credits.
- Keywords
-
- R&D
- Public subsidies
- Quebec
- Productivity
- Difference-in-differences
- JEL codes
-
- H25
- O32
- UNU-MERIT
- Working
- Papers
- ISSN
- 1871-9872
Cite this as
APA 7th ed.Baghana, R. (2010). Public R&D subsidies and productivity: Evidence from firm-level data in Quebec (UNU-MERIT Working Paper No. 2010-055). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=4014