Understanding the Heterogeneous Additionality of R&D Subsidy Programs of Different Government Levels

Abstract

ABSTRACT What explains the different additionality of R&D subsidies through public programmes of different government levels? Does multiple programme participation induce more additionality? We deal with these questions by examining the profile of 8,280 Spanish firms with R&D projects publicly supported through subsidy programmes for the period 2007–2016. We use standard Propensity Score Matching techniques to estimate treatment effects at the firm level, and then we explore the reasons for the heterogeneity in these individual effects through the estimation of an equation for their determinants. We find that, after controlling for a large set of firm characteristics, companies with multiple programme participation show higher additionality, although the effect is lower for firms with very high support intensities. Second, regardless of the government level of the support programme, the degree of additionality is related positively to firm innovativeness and negatively to dimensions that denote a more market-oriented R&D.