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The effects of public R&D subsidies on firms' innovation activities: the case of Eastern Germany

Zentrum für Europäische Wirtschaftsforschung (ZEW) Mannheim
Publication Date
  • O38
  • O31
  • C41
  • Ddc:330
  • Public Innovation Subsidies
  • Non?Parametric Matching
  • Forschungs- Und Technologiepolitik
  • Forschungssubvention
  • Wirtschaftspolitische Wirkungsanalyse
  • Industrielle Forschung
  • Innovation
  • Schätzung
  • Neue Bundesländer
  • Self Selection
  • Selbstselektion


This study analyzes the effects of public R&D policy schemes on the innovation activities of firms located 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 non?parametric matching approach. Compared to the case where no public financial means are provided, it turns out that firms increase their innovation activities by about four percentage points.

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