The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany

This study analyzes the effects of public R&D policy schemes on the innovation activities of firms in Eastern Germany. The main question in this context is whether public funds stimulate R&D activities or simply crowd out privately financed R&D. Empirically, we investigate the average causal effects of all public R&D schemes in Eastern Germany using a nonparametric matching approach. Compared to the case in which no public financial means are provided, it turns out that firms increase their innovation activities by about four percentage points.

Almus, Matthias und Dirk Czarnitzki (2003), The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany, Journal of Business and Economic Statistics 21(2) , 226-236