Page 11 - IDEA Studie 07 2023 TACR

ARE SUBSIDIES TO BUSINESS R&D EFFECTIVE? REGRESSION
DISCONTINUITY EVIDENCE FROM THE TA CR ALFA PROGRAMME IDEA 2023
sub-programmes focused respectively on: 1) advanced technologies, materials and systems; 2) energy resources and environmental protection; and 3) sustainable development of transport. The latter two subprogrammes were focused on relatively specific topics and, crucially for us, proved to be unsuitable for RD analysis due to the small number of projects that met binary criteria for being eligible to receive support and that received evaluator scores reasonably close to the cutoff, but ended up not being supported.3 In contrast, the first subprogramme was designed more broadly and ultimately accounted for a majority of the total projects submitted, and a majority of the total funding .4 For these reasons, we focus on Subprogramme 1, and henceforth all discussion and results refer to that subprogramme only.
Given the rules of the European Commissions, a proposed project budget could be a maximum of 3 million EUR. Fundable R&D expenses covered the whole spectrum of costs, including personnel, material and travel costs, purchases of services, and tangible and intangible investments, except in the last call, in which investment was not eligible. The projects had to commit to produce at least one applied research output as defined at the time of the call announcement by the Office of the Government of the Czech Republic (2022). This could be, for example, a patent, utility model, prototype, pilot plant, verified technology, or software. The subsidy covered eligible costs of the proposed project up to a maximum of 45–80% in small enterprises, 35–75% in medium enterprises and 25–65% in large enterprises, depending on the call, the type of research, and collaboration with a research organization. The average subsidy size was 3.4 million CZK (approx. 130,000 EUR) for SMEs and 3.7 million CZK (approx. 150,000 EUR) for large business enterprises. For comparison, the average and the median R&D expenditure of firms that received subsidies were, respectively, 24.2 and 12.4 million CZK for SMEs and 81.3 and 26.7 million CZK for large firms, and the average and median sales of subsidised firms were 217 and 136 million CZK for SMEs and 3.453 and 1.462 million CZK for large firms. Hence, the subsidies were relatively small.
3 In call 2 of Subprogramme 2 and calls 2 and 4 of Subprogramme 3, there were no projects at all that met the binary criteria but that ended up below the cutoff score for receiving funding. The number of such projects that were additionally within the bandwidth of 5 points around the score cutoff was also very low for call 1 of Subprogramme 2 (2 projects), and call 1 (9 projects), and call 3 (10 projects) of Subprogramme 3.
4 Over the 4 calls, Subprogramme 1 accounted for 55% of submitted project proposals, 44% of funded projects, and 51% of the disbursed funding.
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