The Effects of Public Subsidies on R&D Employment: Evidence from OECD Countries
AbstractExisting empirical evidence suggests that public subsidies and fiscal incentives have a positive effect on the amount of private R&D expenditure. However, most studies have failed to address the possibility at least some of this increase may simply reflect the fact that R&D workers are being paid higher wages. Such an omission may imply that past research has over-estimated the effectiveness of R&D tax concessions. In the absence of widely-available R&D deflators, we consider the impact of a range of public subsidies on the number of fulltime equivalent workers employed in R&D (i.e., researchers) in the business sector. Our findings strongly support the effectiveness of both direct subsidies and fiscal incentives.
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Bibliographic InfoPaper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2010n11.
Length: 37 pages
Date of creation: Jul 2010
Date of revision:
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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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innovation policy; R&D tax credits; R&D investment;
Find related papers by JEL classification:
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-06 (All new papers)
- NEP-INO-2010-08-06 (Innovation)
- NEP-SBM-2010-08-06 (Small Business Management)
- NEP-TID-2010-08-06 (Technology & Industrial Dynamics)
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- Russell Thomson, 2012.
"Measure of R&D Tax Incentives for OECD Countries,"
Melbourne Institute Working Paper Series
wp2012n17, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
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