Distribution of R&D subsidies and its effect on the final outcome of innovation policy

The aim of this article is to analyse the impact of the subventions granted by the Spanish government to innovation activities on the R&D intensity of firms. Our analysis attempts to deal with two of the methodological problems encountered during the evaluation of policy impacts: namely, the non estimation of the "counterfactual" state (what would have happened without the public support); and the problem stemming from the aid distribution process. Subsidy distribution is non-random, andcolud generate problems at the moment of evaluating innovation policies. The results conclude that firms with a clear capacity to guarantee the successful outcome of projects have higher chances of obtaining subsidies. On the other hand, firms in need of financial help for innovation have lower probabilities of obtaining aid. In relation to the casual effects of innovation policy, subsidies induced a scarce additionality effect, inferior to the amount of the aid awanded. The results reveal that the innovation policy has a greater effect on firms with fewer possibilities of obtaining a subsidy