TY  - JOUR
AU  - Klette,Tor Jakob
AU  - Møen,Jarle
AU  - Griliches,Zvi
TI  - Do Subsidies to Commercial R&D Reduce Market Failures?  Microeconomic Evaluation Studies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6947
PY  - 1999
Y2  - February 1999
UR  - http://www.nber.org/papers/w6947
L1  - http://www.nber.org/papers/w6947.pdf
N1  - Author contact info:
Tor Jakob Klette
E-Mail: t.j.klette@econ.uio.no

Jarle Møen
Norwegian School of Economics & Business
Department of Finance & Management
Helleveien 30, N-5045
Bergen, NORWAY
Tel: 47-5595-9612
Fax: 47-5595-9650
E-Mail: jarle.moen@nhh.no

Zvi Griliches
E-Mail: N/A user is deceased
AB  - A number of market failures have been associated with R&D investments and significant amounts of public money have been spent on programs to stimulate innovative activities.  In this paper, we review some recent microeconomic studies evaluating effects of government sponsored commercial R&D.  We pay particular attention to the conceptual problems involved. Neither the firms receiving support, nor those not applying, constitute random samples.  Furthermore, those not receiving support may be affected by the programs due to spillover effects which often are a main justification for R&D subsidies. Constructing a valid control group under these circumstances is challenging, and we relate our discussion to recent advances in econometric methods for evaluation studies based on non-experimental data.  We also discuss some analytical questions that need to be addressed in order to assess whether R&D support schemes can be justified.  For instance, what are the implication of firms' R&D investments being complementary to each other, and to what extent are potential R&D spillovers internalized in the market?
ER  -