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Symposium on Business Dynamics and Innovation: The effects of agglomeration economies Barcelona, 8 October 2008. “Assessing the impact of public funds on private R&D. A comparative analysis between state and regional subsidies ” Sergio Afcha and Jose Garcia-Quevedo, University of Barcelona.

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  1. Symposium on Business Dynamics and Innovation: The effects of agglomeration economiesBarcelona, 8 October 2008 “Assessing the impact of public funds on private R&D. A comparative analysis between state and regional subsidies” Sergio Afcha and Jose Garcia-Quevedo, University of Barcelona

  2. Outline of the presentation Motivation: increasing importance of regional innovation policies Objectives: evaluation of public policies Data and descriptive statistics Methodology and results Conclusions and future lines of research

  3. Motivationforthiswork • In the last two decades increasing interest has been putting in the relationship between geographical location and innovation (Storper, 1997; Audretsch&Feldman, 1999). • Emergence of different concepts about industrial agglomeration: Clusters, Industrial districts, Innovative Millieu, competitive regions etc. Has contributed to the awareness of regional dimension is a suitable level to promote innovation activity.

  4. Motivationforthiswork • More active role of regional actors (Government, Institutions, firms) • Regional governments: specific regional policies in order to promote regional innovation systems. • However... There is few evidence about: Evaluation studies in innovation policy at regional level, and comparisons between regional and central government interventions

  5. MainObjectives This work compares central and regional policies promoting R&D activities: • Analyzing determinants (firms characteristics) of receiving subsidies, both at regional and central level. • Quantifying the effect of central and regional R&D subsidies on firms’ Innovation effort (financial additionality).

  6. Data and descriptive statistics • Data: Survey on Business Strategy, ESEE (Encuesta de estrategias empresariales/FUNEP). • Period: 1998-2005. • Sample: Innovative manufacturing firms. R&D >0.

  7. Descriptive Statistics. Innovative Effort

  8. Results (Probit estimations)

  9. Main hypothesis • If coordination works, relevant variables should not be exactly the same in the Probit regressions. • Coincidence in significant variables could be indicating duplication of goals at different levels of government.

  10. Summary of results: firm characteristics

  11. Evaluation of central and regional R&D subsidies (additional effects?) • Non parametrical Technique: Propensity score Matching. Nearest neighbor matching algorithm. • Purpose: Establish a valid control group in order to compare innovative effort performed by subsidized and non subsidized firms. • Control Group: Innovative firms without subsidies.

  12. Results (Evaluation)

  13. Conclusions and future lines of research • Although some common patterns, evidence of differences (firm characteristics) in the participation in regional and national innovation policy. • Crowding out effect is rejected for central subsidies. Evidence of additionality (Herrera&Heijs, 2007; Fernandez&Pazó, 2008;) • ATT for regional subsidies are not statistically significant. • Regional effects should be estimated by region in order to take in account regional differences. • Regional innovation policy: Need to analyse other additional effects (behavioral)

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