Information asymmetry, risk aversion and R&D subsidies: effect-size heterogeneity and policy conundrums
dc.cclicence | CC-BY-NC-ND | en |
dc.contributor.author | Ugur, Mehmet | |
dc.contributor.author | Trushin, Eshref | |
dc.date.acceptance | 2022-08-27 | |
dc.date.accessioned | 2022-09-14T15:08:14Z | |
dc.date.available | 2022-09-14T15:08:14Z | |
dc.date.issued | 2022-09-07 | |
dc.description | open access article | en |
dc.description.abstract | Drawing on the theory of contracts and Schumpeterian models of innovation, we demonstrate that information asymmetry and risk aversion are conducive to effect-size heterogeneity and sub-optimal allocation of R&D subsidies. Utilising an unbalanced panel of 43,650 British firms from 1998 to 2012 and an entropy balancing methodology, we find that R&D subsidies are less likely to generate additionality effects when: (a) firms are larger, older, or more R&D-intensive; and (b) investment in basic research or during crisis episodes is considered. We also report that over 85% of the subsidies are allocated to large, old and R&D-intensive firms that do not deliver additional R&D investment. Our findings reveal a policy conundrum: the case for R&D subsidies is stronger during economic downturns, when R&D investment is in basic research and when firm age, size and R&D intensity reflect success in converting R&D investment into innovative product lines; but the subsidy is less likely to increase business R&D under these conditions. | en |
dc.funder | ESRC (Economic and Social Research Council) | en |
dc.identifier.citation | Ugur, M. and Trushin, E. (2022) Information asymmetry, risk aversion and R&D subsidies: effect-size heterogeneity and policy conundrums. Economics of Innovation and New Technology, | en |
dc.identifier.doi | https://doi.org/10.1080/10438599.2022.2119563 | |
dc.identifier.uri | https://hdl.handle.net/2086/22160 | |
dc.language.iso | en | en |
dc.peerreviewed | Yes | en |
dc.projectid | ES/K004824/1 | en |
dc.publisher | Taylor and Francis | en |
dc.researchinstitute | Institute for Applied Economics and Social Value (IAESV) | en |
dc.subject | economics of innovation | en |
dc.subject | R&D subsidy | en |
dc.subject | additionality | en |
dc.subject | information asymmetry | en |
dc.subject | risk aversion | en |
dc.subject | entropy balancing | en |
dc.subject | econometric impact evaluation | en |
dc.title | Information asymmetry, risk aversion and R&D subsidies: effect-size heterogeneity and policy conundrums | en |
dc.type | Article | en |
Files
Original bundle
1 - 1 of 1
Loading...
- Name:
- Information asymmetry risk aversion and R D subsidies effect size heterogeneity and policy conundrums.pdf
- Size:
- 2.46 MB
- Format:
- Adobe Portable Document Format
- Description:
- https://www.tandfonline.com/doi/full/10.1080/10438599.2022.2119563
License bundle
1 - 1 of 1
No Thumbnail Available
- Name:
- license.txt
- Size:
- 4.2 KB
- Format:
- Item-specific license agreed upon to submission
- Description: