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The Impact of Innovation and Green Fiscal Incentives on Employment in Spain

Author

Listed:
  • Ester Martínez-Ros

    (Universidad Carlos III de Madrid)

  • Rasi Kunapatarawong

    (Hitachi Consulting Thailand at Q House Lumpini)

Abstract

Questions remain whether the government is aware of difÿculties of incentive schemes, its effectiveness, implications and conditions that are required so policy instrument can be put to the best use. Using a corporate tax dataset for MSMEs (micro ÿrms) and SMEs in 2008, we use OLS to study the relationship between employment and environmental investment tax credit (EI) and technological innovation tax credit (R&D&I). Our results show a positive impact of EI and R&D&I tax credit on employment for MSMEs and SMEs. The impact is stronger for R&D&I tax credit than for EI tax credit and stronger for MSMEs than for SMEs. Also, the impacts of both tax credits are independent of each other. We help to provide insights into the impacts of two types of tax credits on employment level for micro and SMEs that are the backbone of an economy. The important thing is the government must remain engaged in both green and technology policies to ensure policy intervention schemes are powerful and effective.

Suggested Citation

  • Ester Martínez-Ros & Rasi Kunapatarawong, 2019. "The Impact of Innovation and Green Fiscal Incentives on Employment in Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 231(4), pages 125-154, December.
    • Handle: RePEc:hpe:journl:y:2019:v:231:i:4:p:125-154
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental policy; environmental investment tax credit; technological innovation tax credit; employment; MSMEs; SMEs.;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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