IDEAS home Printed from https://ideas.repec.org/a/eip/journl/y2016i1p41-56.html
   My bibliography  Save this article

Fiscal stimulation of innovative activities in Ukraine

Author

Listed:
  • I. Lunina, O. Bilousova, O. Bulana

Abstract

The article analyzes legal framework and practice of fiscal support for innovation in the form of tax incentives and budget funding. The authors summarized existing EU approaches to fiscal stimulation. The authors have analyzed two models of income tax reliefs: 1) Research and Development tax relief/super deduction (UK); 2) Research and Development tax credit and additional (premium) amortization of fixed assets for innovation projects (France). The authors have made estimations of the impact of tax incentives for these models and revealed certain conditions under which these models may appear ineffective. Authors recommend to use the second model for Ukrainian tax reform purposes, because such model is able to create the basis for the development of innovation activities, whereby tax savings would be used to acquire new technologies, fixed assets, equipment and intangible assets (given the high depreciation, low efficiency of capital investments and delays in implementing of new technologies). It is established that the development of innovative businesses and promoting scientific and technological activities of enterprises is a complex issue that affects various aspects of public administration. To ensure progress in this sphere, the following tasks should be completed: ensuring sufficient funding and good governance in education and fundamental scientific research; establishing transparent requirements for assistance to entrepreneurs in research and innovation; and increasing the number of tax incentives for innovation. The authors propose various amendments to the Tax and Customs Code of Ukraine. This article continues the discussion on the creation of an effective national research and innovation system that would speed up Ukraine's integration into the world economic and technological space, and concentrate available resources (capital, labor, market) to achieve national priorities as key factors for economic development. The article was written as part of the research on: "Consolidation of public finances of Ukraine in conditions of the global financial instability", "Financial support for structural modernization of the real sector of Ukraine's economy" completed at the Institute for Economics and Forecasting, NAS of Ukraine. The article was written as part of the research on: "Public finance consolidation in Ukraine in the global financial instability", and "Financial support for structural modernization of the real sector of economy of Ukraine" completed at State Institution "Institute for Economics and Forecasting of NAS of Ukraine."

Suggested Citation

  • I. Lunina, O. Bilousova, O. Bulana, 2016. "Fiscal stimulation of innovative activities in Ukraine," Economy and Forecasting, Valeriy Heyets, issue 1, pages 41-56.
    • Handle: RePEc:eip:journl:y:2016:i:1:p:41-56
    as

    Download full text from publisher

    File URL: http://eip.org.ua/docs/EP_16_1_41_uk.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Saul Lach, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 369-390, December.
    2. Lach, Saul, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 369-390, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sergio Afcha & Jose García-Quevedo, 2016. "The impact of R&D subsidies on R&D employment composition," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(6), pages 955-975.
    2. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    3. Christian Volpe Martincus & Jerónimo Carballo, 2010. "Is Export Promotion Effective in Developing Countries? Firm-Level Evidence on the Intensive and Extensive Margins of Exports," IDB Publications (Working Papers) 36763, Inter-American Development Bank.
    4. Jean Acheson & Rory Malone, 2020. "Respect Your Elders: Evidence from Ireland’s R&D Tax Credit Reform," The Economic and Social Review, Economic and Social Studies, vol. 51(1), pages 105-131.
    5. Alessandra Catozzella & Marco Vivarelli, 2016. "The possible adverse impact of innovation subsidies: some evidence from Italy," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 351-368, June.
    6. Hünermund, Paul & Czarnitzki, Dirk, 2019. "Estimating the causal effect of R&D subsidies in a pan-European program," Research Policy, Elsevier, vol. 48(1), pages 115-124.
    7. González, Xulia & Pazó, Consuelo, 2008. "Do public subsidies stimulate private R&D spending?," Research Policy, Elsevier, vol. 37(3), pages 371-389, April.
    8. Chiara Binelli & Alessandro Maffioli, 2007. "A Micro-econometric Analysis of Public Support to Private R&D in Argentina," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(3), pages 339-359.
    9. Zhao, Shukuan & Xu, Baoda & Zhang, Weiyong, 2018. "Government R&D subsidy policy in China: An empirical examination of effect, priority, and specifics," Technological Forecasting and Social Change, Elsevier, vol. 135(C), pages 75-82.
    10. Besanko, David & Tong, Jian & Wu, Jianjun, 2016. "Subsidizing research programs with "if" and "when" uncertainty in the face of severe informational constraints," Discussion Paper Series In Economics And Econometrics 1605, Economics Division, School of Social Sciences, University of Southampton.
    11. Dechezlepretre, Antoine & Einiö, Elias & Martin, Ralf & Nguyen, Kieu-Trang & Reenen, John Van, 2016. "Do tax incentives for research increase firm innovation? An RD design for R&D, patents and spillovers," LSE Research Online Documents on Economics 66428, London School of Economics and Political Science, LSE Library.
    12. Dirk Czarnitzki & Julie Delanote, 2017. "Incorporating innovation subsidies in the CDM framework: empirical evidence from Belgium," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 78-92, February.
    13. Emmanuel Chavez, 2020. "The Effects of Public R&D Subsidies on Private R&D Activities in Mexico," Working Papers halshs-02355106, HAL.
    14. Anders Gustafsson & Andreas Stephan & Alice Hallman & Nils Karlsson, 2016. "The “sugar rush” from innovation subsidies: a robust political economy perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(4), pages 729-756, November.
    15. Blanes, J. Vicente & Busom, Isabel, 2004. "Who participates in R&D subsidy programs?: The case of Spanish manufacturing firms," Research Policy, Elsevier, vol. 33(10), pages 1459-1476, December.
    16. Ugur, Mehmet & Trushin, Eshref, 2018. "Asymmetric information and heterogeneous effects of R&D subsidies: evidence on R&D investment and employment of R&D personel," Greenwich Papers in Political Economy 21943, University of Greenwich, Greenwich Political Economy Research Centre.
    17. Srhoj, Stjepan & Walde, Janette, 2020. "Getting ready for EU Single Market: The effect of export-oriented grant schemes on firm performance," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 279-293.
    18. Luca Grilli & Samuele Murtinu, 2011. "Econometric Evaluation of Public Policies for Science and Innovation: A Brief Guide to Practice," Chapters, in: Massimo G. Colombo & Luca Grilli & Lucia Piscitello & Cristina Rossi-Lamastra (ed.), Science and Innovation Policy for the New Knowledge Economy, chapter 3, Edward Elgar Publishing.
    19. Nishimura, Junichi & Okamuro, Hiroyuki, 2011. "Subsidy and networking: The effects of direct and indirect support programs of the cluster policy," Research Policy, Elsevier, vol. 40(5), pages 714-727, June.
    20. Paul Hünermund & Dirk Czarnitzki, 2016. "Estimating the local average treatment effect of R&D subsidies in a pan-European program," Working Papers of Department of Management, Strategy and Innovation, Leuven 541177, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eip:journl:y:2016:i:1:p:41-56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iryna Bazhal (email available below). General contact details of provider: http://eip.org.ua/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.