Estimating Spillovers from Publicly Funded R&D

The paper presented in this ZEW Research Seminar quantifies the magnitude of R&D spillovers created by grants to small firms from the US Department of Energy. Their empirical strategy leverages variation due to state-specific matching policies, and they develop a new approach to measuring both geographic and technological spillovers that does not rely on an observable paper trail. The authors estimates suggest that for every patent produced by grant recipients, three more are produced by others who benefit from spillovers. Sixty percent of these spillovers occur within the US, and many of them occur in technological areas substantially different from those targeted by the grants.