Evaluating innovation policy : a structural treatment effect model of R&D subsidies

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Title: Evaluating innovation policy : a structural treatment effect model of R&D subsidies
Author: Takalo, Tuomas ; Tanayama, Tanja ; Toivanen, Otto
Organization: Suomen Pankki
Series: Bank of Finland Research Discussion Papers
Series number: 7/2008
Year of publication: 2008
Publication date: 1.3.2008
Published in: Published in Review of Economics and Statistics, March 2013, Vol. 95, No. 1, Pages 255-272
Pages: 58 s.
Keywords: R&D; innovaatiot; mallit; talouskasvu; Suomi; tukipalkkiot; innovaatiopolitiikka
JEL: L53; C31
Abstract: This paper studies the welfare effects of R&D subsidies. We develop a model of continuous optimal treatment with outcome heterogeneity where the treatment outcome depends on applicant investment. The model takes into account heterogeneous application costs and identifies the treatment effect on the public agency running the programme. Under the assumption of a welfare-maximizing agency, we identify general equilibrium treatment effects. Applyiing our model to R&D project-level data we find substantial treatment effect heterogeneity. Agency-specific treatment effects are smaller than private treatment effects. We find that the rate of return on subsidies for the agency is 30-50%. Keywords: applications, effort, investment, R&D, selection, subsidies, treatment programme, treatment effects, welfare JEL classification numbers: 038, 031, L53, C31
Note: Katso myös artikkeli Review of economics and statistics 95 ; 1 ; 2013.
Rights: https://helda.helsinki.fi/bof/copyright

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