González, X.Jaumandreu, JordiPazó, Consuelo2009-09-162009-09-162005Rand Journal of Economics. 2005, vol. 36, nº 4, p. 930-9501756-2171https://hdl.handle.net/10016/5202We explore the effects of subsidies by means of a model of firms' decisions about performing R&D when some government support can be expected. We estimate it with data on about 2,000 performinga nd nonperformingS panishm anufacturingfi rms. Wec omputet he subsidies required to induce R&D spending, we detect the firms that would cease to perform R&D without subsidies, and assess the change in the privately financed effort. Results suggest that subsidies stimulate R&D and some firms would stop performing in their absence, but most actual subsidies go to firms that would have performed R&D otherwise. We find no crowding out of private funds.application/pdfeng©RAND Corporationresearch articleEconomíaopen access