Are subsidies to business R&D effective? Regression discontinuity evidence from the TA CR ALFA programme

0573283 - NHÚ 2024 RIV CZ eng V - Research Report
Bajgar, Matěj - Srholec, Martin
Are subsidies to business R&D effective? Regression discontinuity evidence from the TA CR ALFA programme.
Praha: Národohospodářský ústav AV ČR, v. v. i., 2023. 38 s. Studie IDEA, 7/2023. ISBN 978-80-7344-673-4
Institutional support: RVO:67985998
Keywords : government subsidies * innovations * economic development
OECD category: Applied Economics, Econometrics
https://idea.cerge-ei.cz/files/IDEA_Studie_07_2023_TACR/files/extfile/IDEA_Studie_07_2023_TACR.pdf

Governments subsidise business research and experimental development (R&D) to promote development of the economy, because externalities and information asymmetries inherent to the innovation process make private funding of these activities fall short of what is socially desirable. Nevertheless, how effective such subsidies are and whether they achieve their goals is an open question that needs to be studied empirically. This study leverages the state-of-the-art method of regression discontinuity (RD) that allows us to come very close to making causal inferences about the effects of subsidies, to find out whether the Technology Agency of the Czech Republic’s (TA CR) ALFA programme stimulated new business R&D inputs, outputs, and positive economic impacts that would not have happened otherwise.
Permanent Link: https://hdl.handle.net/11104/0343749