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How R&D and tax incentives influence economic growth: Econometric study for the period between 1995 and 2008 of EU-15

  • Paula Faria

    ()

    (Faculdade de Economia, Universidade do Porto)

  • Francisco Vitorino da Silva Martins

    ()

    (Faculdade de Economia, Universidade do Porto)

  • Elísio Fernando Moreira Brandão

    ()

    (Faculdade de Economia, Universidade do Porto)

Registered author(s):

    Setting targets to increase the levels of R&D, a component that is present in the political and economic agendas of the European Member States with the promotion of active tax policies, suggests that it is possible for R&D to cause an impact on economic growth. This research work aims at understanding the influence of the evolution of R&D expenditures, as well as the influence of tax incentives on economic growth. For that, a panel data of 15 European countries, during the period between 1995 and 2008, was used. The econometric study confirms the foreseen importance, both in this study and in the literature, of the countries’ R&D efforts and their impact on economic growth. The positive effect of tax incentives on economic growth, combined with R&D levels, is highlighted and demonstrated, thus confirming a strategic orientation towards tax policies followed by the national institutions.

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    File URL: http://www.fep.up.pt/investigacao/workingpapers/11.11.21_wp442.pdf
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    Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 442.

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    Length: 20 pages
    Date of creation: Nov 2011
    Date of revision:
    Handle: RePEc:por:fepwps:442
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    1. Afonso, António & González Alegre, Juan, 2008. "Economic growth and budgetary components: a panel assessment for the EU," Working Paper Series 0848, European Central Bank.
    2. Robert J Barro, 1999. "Determinants of Economic Growth: Implications of the Global Evidence for Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 36(107), pages 443-478.
    3. Bassanini, Andrea & Scarpetta, Stefano, 2002. "Does human capital matter for growth in OECD countries? A pooled mean-group approach," Economics Letters, Elsevier, vol. 74(3), pages 399-405, February.
    4. Good, David F. & Ma, Tongshu, 1999. "The economic growth of Central and Eastern Europe in comparative perspective, 1870 1989," European Review of Economic History, Cambridge University Press, vol. 3(02), pages 103-137, August.
    5. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    6. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
    7. Sandra Tavares Silva & Mário Rui Silva, 2000. "Crescimento Económico Nas Regiões Europeias: Uma Avaliação Sobre A Persistência Das Disparidades Regionais No Período 1980-95," FEP Working Papers 96, Universidade do Porto, Faculdade de Economia do Porto.
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