Effectiveness of public support for R&D and entrepreneurship

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

The papers by Dortet-Bernadet and Sicsic and by Redor in this issue examine respectively the success of R&D financial support programs in stimulating private R&D and the success of subsidized start-ups for the unemployed in creating long-lasting firms. Both papers focus on small French firms. Both programs are found to suffer from a deadweight loss. This comment discusses the results obtained and the policy conclusions that can be drawn from them. It is argued that the deadweight loss is in part unavoidable but that there are ways to limit it, for instance by using a policy mix of R&D tax incentives and subsidies, favoring tax incentives for small firms and subsidies for large firms. It is also recalled that a policy ought to be evaluated from various perspectives. Besides R&D additionality and firm survival a full cost benefit analysis would also consider R&D externalities, firm retention and decrease in unemployment.
Original languageEnglish
Pages (from-to)45-52
Number of pages8
JournalEconomie et Statistique
Volume2017
Issue number493
Publication statusPublished - 5 Jul 2017

JEL classifications

  • o31 - Innovation and Invention: Processes and Incentives
  • o32 - Management of Technological Innovation and R&D
  • h20 - Taxation, Subsidies, and Revenue: General

Keywords

  • Policy evaluation
  • R&D subsidies
  • R&D tax incentives
  • Start-up subsidies

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