VOLUME XV
AUTUMN 2007

DISTRIBUTION AND ADDITIONALITY OF THE PUBLIC AID TO INNOVATION
 
LILIANA HERRERA
Universidad de León
JOOST HEIJS
Universidad Complutense de Madrid
 
In this study we analyse the impact of the subventions granted by the Spanish government to innovation activities on the R&D intensity of firms. Our analysis attempts to deal with two of the methodological problems encountered when evaluating policy impact: the non-estimation of a“counter-factual” state (what would have happened without the public support) and the problem stemming from the aid distribution process. The distribution of support is non-random and could create problems when evaluating the innovation policies. The analysis concludes that firms with a defined capacity to guarantee the successful outcome of projects have higher chances of obtaining subsidies. On the other hand, firms with a necessity to finance innovation have lower probabilities of obtaining aid. With regard to the additionality effect, this study found that the subsidies increased the firms’ R&D intensity.
 
Key words: innovation policy evaluation, R&D, R&D subsidies, additionality.
JEL classification: O3, 031, 038.

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