Abstract
We study the expected welfare effects of targeted R&D subsidies using project-level data from Finland. We model the application and R&D investment decisions of firms and the subsidy-granting decision of the public agency in charge of the program. Our model and institutional environment allow us to identify different benefits and costs of the R&D subsidy program. We find that expected effects of subsidies are very heterogeneous and estimated application costs low on average. The social rate of return on targeted subsidies is 30% to 50%, but spillover effects of subsidies are smaller than effects on firm profits.
| Original language | English |
|---|---|
| Peer-reviewed scientific journal | Review of Economics and Statistics |
| Volume | 95 |
| Issue number | 1 |
| Pages (from-to) | 255-272 |
| Number of pages | 18 |
| ISSN | 0034-6535 |
| DOIs | |
| Publication status | Published - 01.03.2013 |
| MoE publication type | A1 Journal article - refereed |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 9 Industry, Innovation, and Infrastructure
Keywords
- 511 Economics
- Mathematical models of economics
- Subsidies
- Federal aid to research
- Externalities (Economics)
- Research & development -- Economic aspects
- Institutional environment
- Finland
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