Economie et Statistique / Economics and Statistics n° 493Evaluation of public support to small and medium-sized firms - Varia

Economie et Statistique / Economics and Statistics
Paru le : 05/07/2017

Effectiveness of public support for R&D and entrepreneurship

Pierre Mohnen
Economie et Statistique / Economics and Statistics
Paru le : 05/07/2017

Comment on the papers “The effect of R&D subsidies and tax incentives on employment: an evaluation for small firms in France”(i) by Vincent Dortet-Bernadet and Michaël Sicsic, and “Do public subsidies have an impact on start-ups survival rates? An assessment for four cohorts of firms set up by previously unemployed entrepreneurs in France”(ii) by Dominique Redor.

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.

Article (pdf, 496 Ko)

To cite this article

Möhnen, P. (2017). Effectiveness of public support for R&D and entrepreneurship. Comment on "The effect of R&D subsidies and tax incentives on employment: an evaluation for small firms in France" and "Do public subsidies have an impact on start-ups survival rates? An assessment for four cohorts of firms set up by previously unemployed entrepreneurs in France". Economie et Statistique / Economics and Statistics, 493, 45-52. DOI: 10.24187/ecostat.2017.493s.1911

Documentation

Summary (pdf, 268 Ko)