Do direct subsidies promote private R&D expenditure? Evidence from regression discontinuity design

Abstract

The aim of this study is to illustrate the evaluation of direct subsidies for business R&D expenditures using a regression discontinuity approach. We use data from the 3rd call for proposals in the ALFA programme of the Technology Agency of the Czech Republic.

Our analysis compares the growth rates of private R&D expenditures of subsidized and unsubsidized firms that ranked close to the threshold above subsidies were awarded.

Keywords

• direct subsidies
• R&D expenditure