Impact of P&D Incentive Program on the Performance and Technological Efforts of Brazilian Industrial Firms.

Public policies that promote R&D in firms are evaluated on a regular basis in developed countries. However, this type of study is relatively rare in developing countries.. In Brazil no impact evaluation analysis that use information at firms’ level has been published. The present study, which assesses the impact of the National Technological Development Support Program (ADTEN)1 on the technical performance and strength of Brazilian industrial firms, is unprecedented in its content and method. It shows that this R&D incentive program reaches a relatively limited number of firms, considering the magnitude of the Brazilian industrial sector. The program reaches only 0.07% of Brazilian industrial firms with over 10 employees, and the volume of resources that firms borrowed within the program’s framework was only 1.6% and 3% of their R&D expenditures in 2000 and 2003, respectively. It was found evidences that ADTEN had a positive influence on companies’ private R&D expenditures from 1996 to 2003. One can say that at least the crowding out hypothesis can be rejected. There are also strong evidences that the program has positively influenced the growth of firms, their productivity and patent applications, although results are not conclusive for these two last indicators.