Evaluating the Effectiveness of Public Support to Private R&D: Evidence from Argentina

The paper investigates the relationship between government interventions to promote investments in innovation and firms-financed R&D. Merging a unique panel data set on Argentinean firms in the 1990s with a data base on different types of public support received through FONTAR program, we estimate a fixed effects model and find evidence of a significant positive impact of FONTAR on private R&D. The result is robust to the use of an IV estimator that controls for the potential bias induced by changes in the structure of the program.