Impact analysis of industrial research and development subsidy programs in Turkey: an appraisal of quantitative approaches

Tandoğan, Vedat Sinan
This thesis has two objectives in the field of policy evaluation that recently received extensive attention from international science and technology community. First, an attempt is made to examine, in the Turkish context, the effects of public subsidies on private research and development (R&D), selecting and implementing a suitable empirical methodology. Second, in the context of emerging economies, it aims to contribute to the existing impact analysis literature by providing an evaluation study for the period during which public incentives in business R&D have gained momentum with increased resources for diversified policy measures in Turkey since 2004. In the dissertation, three quantitative studies examining the causal relations between direct public support and private R&D are presented. The first study, which uses the Tobit model, indicates that receiving a subsidy is an important determinant of private R&D intensity. In the second study, adopting the propensity score matching and difference-in-differences methods and using a panel dataset, effectiveness of receiving a grant from the TUBITAK industrial R&D support program is examined. The results indicate program-induced input additionality in (i) R&D personnel, (ii) R&D intensity and (iii) R&D expenditure per employee of the beneficiary firms during 2004-2006. The analysis with the propensity score matching using the data from Turkish Community Innovation Survey 2006 is repeated and similar results are obtained. The results validate that engagement in public R&D programs in Turkey is beneficial for private R&D. Sufficient evidence was obtained to conclude that TUBITAK’s industrial R&D project support program has encouraged most private firms to increase their R&D spending and R&D personnel in the period of 2003-2006.