EVALUATIONS THAT CHALLENGE THE STATUS QUO: USE OF STATISTICAL TECHNIQUES IN MEASURING ADDITIONALITY Australasian Evaluation Society International Conference.

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Presentation transcript:

EVALUATIONS THAT CHALLENGE THE STATUS QUO: USE OF STATISTICAL TECHNIQUES IN MEASURING ADDITIONALITY Australasian Evaluation Society International Conference Sydney, Australia, 29 August – 2 September 2011 Michele Morris 1 Pene Greet 2 Oliver Herrmann 2 Kris Iyer 2 Philip Stevens 2 1 New Zealand Ministry for the Environment 2 New Zealand Ministry of Economic Development

Overview Evaluation of publicly-funded research and development grants New wide-coverage business database Statistical techniques Counterfactual / control group Results and conclusions Limitations and related evaluations

Policy objectives and grants Increase and enhance the R&D. Increase the economic performance. Two different types of government R&D subsidies – assistance to build R&D capability – assistance for R&D projects Assisted firms – larger – higher sales – capital intensive – exporting and – undertaking R&D

Prototype Longitudinal Business Database (LBD) High quality and comprehensive firm-level data (micro-data) from 2000 to Linking administrative and survey information – financial performance – employment – merchandise trade – business practices – government assistance

Statistical techniques Changes in performance of assisted firms to matched similar New Zealand firms. The additional impact – result of the public subsidy alone – impact due to other factors that also affect firms’ performance Comparing actual and counterfactual outcomes.

Counterfactual

Control group and matching variables Employment and change in employment Total productivity and change in total productivity Capital intensity and change in capital intensity Exporting industry Firms in group Firm age R&D activity Ownership status

General results Significant impact on economic performance of the firms due to the R&D subsidies. Impact is less than that measured by related evaluations. “Capability Building” has a positive impact on employment growth, sales, value added, and productivity. Counterintuitive finding: No impacts for “Project Funding” !

Detailed results Influence of firm size and prior R&D activity on the results? Positive impacts for small firms. Positive impacts for firms that had not undertaken R&D two years prior to receiving their assistance. No impacts for large firms and no impacts for prior R&D performers.

Conclusion Government R&D subsidies have a significant positive impact when they are targeted at firms that are building capability; that are small; that have not previously undertaken R&D. No impacts for large firms. No impacts for prior R&D performers.

Limitations and related evaluations Data limitations (4 years) Previous evaluations (case studies and surveys) showed very positive outcomes. Before/After comparison (completion of the grant) does not inform about any additional impact. Most previous evaluations have overestimated the economic impact. Our methods address this question by comparing the performance of an assisted firm to a matched similar firm.