This study introduces CEM(Coarsened Exact Matching) method and
evaluate the effects of public R&D subsidies on firm’s R&D expenditure by
using CEM. Also, it provides a basis on which CEM method can be variously
utilized in future program evaluations by presenting the advantages and
disadvantages of CEM through comparison with other matching methods such
as PSM and MDM. As one of the matching method, CEM has the following
advantages compared to other matching methods. First, the analyst can
control the imbalance occurring in the matching process in advance. Second,
by limiting the matched data with the common empirical support, CEM can
reduce the modeling dependence without iterative matching procedures. In
comparison with other matching methods, CEM generated the smallest
imbalance. However, CEM can’t use some of the observations in treatment
group due to non-matching results. Although CEM has the above
disadvantage, I think that CEM should be extensively used in terms of
reducing imbalance in the matching process.