Subsidies, Loans and Tax Incentives for Business R&D in Catalonia

The aim of the study is to analyze the impact of public support on R&D investment among Catalan firms. The text approaches the analysis from a triple perspective. Firstly, it details the characteristics of Catalan firms that have benefitted from public support for R&D. Secondly, it establishes whether public support fulfills the principle of additionality and stimulates the innovative efforts of Catalan companies. And thirdly, it analyses whether support affects the composition of private investments in R&D. To address these issues, we have information provided by the questionnaires of the Community Innovative Survey (CIS) which, based on a sample of 3,410 Catalan firms, reflect the aid received during the period 2010-2012. A two-stage Heckman model is applied during the econometric development to correct sample selection bias. Of the results obtained, two stand out. On the one hand, public support produces a positive effect on the innovative efforts of Catalan firms; and on the other, government support alters the composition of the R&D investments of innovative Catalan firms in favour of the investments with lower risk and closer to the market.