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The Impact of Public Funding and Tax Incentives on Russian Firms: Additionality Effects Evaluation

Author

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  • Simachev, Y.

    (National Research University Higher School of Economics, Moscow, Russia)

  • Kuzyk, M.

    (Interdepartmental Analytical Center, Moscow, Russia
    Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia)

  • Zudin, N.

    (Center for Strategic Research, Moscow, Russia)

Abstract

In the following study a microeconomic assessment of the implementation results of tax and financial policies aimed at stimulating firms' innovation activity is carried out. The approach used is based on the provisions of the additionality concept. The authors systematized and summarized the results of more than thirty empirical studies examining the additionality effects of tax and financial incentives for innovation. Obtained results suggest that financial support more often leads to significant positive results, mainly to the growth of company's investment in new equipment, the increase in the production volume of innovative products and the acceleration of projects implementation. However, the use of tax instruments is much less likely to crowd out private investment. Generally, public support rather poorly stimulates the development of the science-business cooperation.

Suggested Citation

  • Simachev, Y. & Kuzyk, M. & Zudin, N., 2017. "The Impact of Public Funding and Tax Incentives on Russian Firms: Additionality Effects Evaluation," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 59-93.
    • Handle: RePEc:nea:journl:y:2017i:34:p:59-93
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    Cited by:

    1. Kuzyk, M. & Simachev, Yu. & Fedyunina, A., 2020. "Participation of fast-growing SMEs in international trade and implications for public policy," Journal of the New Economic Association, New Economic Association, vol. 45(1), pages 208-218.
    2. Aleksandra L. Suslina & Roman S. Leukhin, 2018. "Do Tax Incentives for Innovation Work? Evaluation of Effectiveness in Russia and in the World," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 58-69, October.
    3. Mikhail Kuzyk & Anna Grebenyuk & Evgenia Kakaeva & Evgeniy Manchenko & Vladimir Dovgiy, 2017. "What Prevents Universities from the Involvement into the Creating Dual Technologies?," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 11(4), pages 84-95.
    4. Vlasova, Valeriya, 2021. "Industry-science cooperation and public policy instruments utilization in the private sector," Journal of Business Research, Elsevier, vol. 124(C), pages 519-528.

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    More about this item

    Keywords

    promotion of innovation activities; public policy evaluation; additionality concept; firms' innovation behavior; financial support; tax incentives;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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