Ebook: The impact of R&D subsidies on R&D employment composition

In this paper we examine the impact of subsidies granted at national and regional levels
on a set of R&D employment variables and, specifically, we seek to identify the
existence of the behavioural additionality effects of these public subsidies on firms’
R&D human resources. We begin by assessing the effects of public funds on R&D
private expenditures and on the number of R&D employees, and then focus on their
impact on the composition of human resources engaged in R&D as classified by
occupation and level of education.
The data used correspond to the Spanish Technological Innovation Panel for the period
2006-2011. To control for selection bias and endogeneity, a combination of nonparametric matching techniques are implemented. After ruling out the existence of
crowding out effects, our results show that R&D subsidies increase the number of R&D
employees. However, no increase is found in the average level of qualification of R&D
staff members in subsidized firms. All in all, the effects of public support are
heterogeneous being dependent on the source of the subsidy and the firms’
characteristics.
Keywords: R&D subsidies, R&D employment, matching estimators, technology
policy.
JEL Codes: O38, J24, H25, C14.