Public R&D Subsidies And Productivity: Evidence From Firm-Level Data In Quebec

This paper analyses empirically the impacts of public R&D grants on private R&D investments and on the productivity growth of the manufacturing firms in a context where fiscal incentives are present. Using the conditional semiparametric difference-indifferences estimator on longitudinal data from Quebec the authors show that firms that use public grants for R&D in conjunction with tax credits for R&D perform better in terms of R&D input additionality than firms that use only tax credits for R&D. They then use a production function to assess the effectiveness of public R&D grants in the productivity growth of firms.