Public R&D subsidies and productivity: Evidence from firm-level data in Quebec
Baghana, Rufin (2010). Public R&D subsidies and productivity: Evidence from firm-level data in Quebec. UNU-MERIT.
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Author Baghana, Rufin Title Public R&D subsidies and productivity: Evidence from firm-level data in Quebec Publication Date 2010 Publisher UNU-MERIT Abstract 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. Keyword R&D
Public subsidies
Quebec
Productivity
Difference-in-differencesJEL H25
O32Copyright Holder UNU-MERIT Copyright Year 2010 ISSN 1871-9872 -
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