An evaluation of the Brazilian Informatics Law and its impacts on business R&D expenditure in the 2000's

Abstract

The purpose of this article is to evaluate if the brazilian informatics law has been able to promote significant private expenditures in R & D resulting in so-called additionality effects (crowd in). The analysis is based on the microdata of the Innovation Research (Pintec-IBGE), through which three panels were constructed, each of which covering two consecutive periods. Through the estimates, it was possible to verify the effects of the law for the periods 2003-2005; 2005-2008 and 2008-2011. In order to overcome the problems of selection bias, which are typical of innovation policy evaluations estimates, it was apllied the differences-in-differences (DID) methodology with covariates. Although the results indicate no crowding out effects, additionality effects occurred in only one period. So, it was not possible to conclude that the law was effective throughout the whole period.