Sunk Costs, Extensive R&D Subsidies, and Permanent Inducement Effects

ZEW Lectures on Economic Policy

We study whether there is scope for using subsidies to smooth out barriers to R&D performance and expand the share of R&D firms in Spain. We consider a dynamic model with sunk entry costs in which firms' optimal participation strategy is defined in terms of two subsidy thresholds that characterize entry and continuation. We compute the subsidy thresholds from the estimates of a dynamic panel data type-2 tobit model for an unbalanced panel of about 2,000 Spanish manufacturing firms. The results suggest that "extensive" subsidies are a feasible and efficient tool for expanding the share of R&D firms.

Personen

Prof. Pierre Mohnen

Pierre Mohnen // MERIT, University of Maastricht

Anfahrt

Adresse

maps

Klicken Sie auf den unteren Button, um den Inhalt nachzuladen. (Ich bin damit einverstanden, dass mir externe Inhalte angezeigt werden. Mehr dazu in unserer Datenschutzerklärung.)

,
  • Raum Brüssel