IDEAS home Printed from https://ideas.repec.org/p/tik/inowpp/20150424.html
   My bibliography  Save this paper

The additionality effects of R&D tax credits across sectors: A cross-country microeconometric analysis

Author

Listed:
  • Isabel Bodas Freitas

    (Grenoble School of Management)

  • Fulvio Castellacci

    (TIK Centre, University of Oslo)

  • Roberto Fontana

    (Bocconi University)

  • Franco Malerba

    (Bocconi University)

  • Andrea Vezzulli

    (Bocconi University)

Abstract

Do the additionality effects of R&D tax credits vary across sectors? The paper presents a microeconometric analysis of this question for three countries: Norway, Italy and France. We use a panel of firm-level data from three waves of the Innovation Surveys carried out in these countries, referring to the years 2004, 2006 and 2008 respectively. The study estimates input and output additionality effects of R&D tax credits in each of these economies, and it investigates how these effects differ across sectors characterized by different R&D orientation and competition conditions. The results point out that firms in industries with high R&D orientation and in sectors with high market concentration are on average more responsive to fiscal incentives to R&D.

Suggested Citation

  • Isabel Bodas Freitas & Fulvio Castellacci & Roberto Fontana & Franco Malerba & Andrea Vezzulli, 2015. "The additionality effects of R&D tax credits across sectors: A cross-country microeconometric analysis," Working Papers on Innovation Studies 20150424, Centre for Technology, Innovation and Culture, University of Oslo.
  • Handle: RePEc:tik:inowpp:20150424
    as

    Download full text from publisher

    File URL: http://www.sv.uio.no/tik/InnoWP/tik_working_paper_20150424.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    2. repec:ags:stataj:119292 is not listed on IDEAS
    3. Rufin Baghana & Pierre Mohnen, 2009. "Effectiveness of R&D tax incentives in small and large enterprises in Québec," Small Business Economics, Springer, vol. 33(1), pages 91-107, June.
    4. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, Oxford University Press, vol. 120(2), pages 701-728.
    5. Boris Lokshin & Pierre Mohnen, 2012. "How effective are level-based R&D tax credits? Evidence from the Netherlands," Applied Economics, Taylor & Francis Journals, vol. 44(12), pages 1527-1538, April.
    6. Emmanuel Duguet, 2012. "The effect of the incremental R&D tax credit on the private funding of R&D an econometric evaluation on french firm level data," Revue d'économie politique, Dalloz, vol. 122(3), pages 405-435.
    7. Philippe Aghion & Philippe Askenazy & Nicolas Berman & Gilbert Cette & Laurent Eymard, 2012. "Credit Constraints And The Cyclicality Of R&D Investment: Evidence From France," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1001-1024, October.
    8. Rachel Griffith & Rupert Harrison & Helen Simpson, 2010. "Product Market Reform and Innovation in the EU," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 389-415, June.
    9. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    10. Daniel J. Wilson, 2009. "Beggar Thy Neighbor? The In-State, Out-of-State, and Aggregate Effects of R&D Tax Credits," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 431-436, May.
    11. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    12. Czarnitzki, Dirk & Hanel, Petr & Rosa, Julio Miguel, 2011. "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms," Research Policy, Elsevier, vol. 40(2), pages 217-229, March.
    13. Fulvio Castellacci & Jinghai Zheng, 2010. "Technological regimes, Schumpeterian patterns of innovation and firm-level productivity growth," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1829-1865, December.
    14. Swenson, C. W., 1992. "Some tests of the incentive effects of the research and experimentation tax credit," Journal of Public Economics, Elsevier, vol. 49(2), pages 203-218, November.
    15. Cappelen, Ådne & Raknerud, Arvid & Rybalka, Marina, 2012. "The effects of R&D tax credits on patenting and innovations," Research Policy, Elsevier, vol. 41(2), pages 334-345.
    16. 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.
    17. Hanna Hottenrott & Bettina Peters, 2012. "Innovative Capability and Financing Constraints for Innovation: More Money, More Innovation?," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1126-1142, November.
    18. Castellacci, Fulvio & Lie, Christine Mee, 2015. "Do the effects of R&D tax credits vary across industries? A meta-regression analysis," Research Policy, Elsevier, vol. 44(4), pages 819-832.
    19. Philippe Aghion & Philippe Askenazy & Nicolas Berman & Gilbert Cette & Laurent Eymard, 2008. "Credit constraints and the cyclicality of R&D investment: Evidence from France," PSE Working Papers halshs-00586744, HAL.
    20. Austin Nichols, 2007. "Causal inference with observational data," Stata Journal, StataCorp LP, vol. 7(4), pages 507-541, December.
    21. Giovanni Cerulli & Bianca Potì, 2012. "The differential impact of privately and publicly funded R&D on R&D investment and innovation: the Italian case," Prometheus, Taylor & Francis Journals, vol. 30(1), pages 113-149, March.
    22. repec:ags:stataj:122619 is not listed on IDEAS
    23. Malerba, Franco & Orsenigo, Luigi, 1996. "Schumpeterian patterns of innovation are technology-specific," Research Policy, Elsevier, vol. 25(3), pages 451-478, May.
    24. Castellacci, Fulvio, 2008. "Technological paradigms, regimes and trajectories: Manufacturing and service industries in a new taxonomy of sectoral patterns of innovation," Research Policy, Elsevier, vol. 37(6-7), pages 978-994, July.
    25. Tang, Jianmin, 2006. "Competition and innovation behaviour," Research Policy, Elsevier, vol. 35(1), pages 68-82, February.
    26. Paff Lolita A, 2005. "State-Level R&D Tax Credits: A Firm-Level Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-27, September.
    27. Tuomas Takalo & Tanja Tanayama & Otto Toivanen, 2013. "Estimating the Benefits of Targeted R&D Subsidies," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 255-272, March.
    28. Czarnitzki, Dirk & Hussinger, Katrin, 2004. "The Link Between R&D Subsidies, R&D Spending and Technological Performance," ZEW Discussion Papers 04-56, ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung GmbH Mannheim / Leibniz Centre for European Economic Research.
    29. Geroski, P A, 1990. "Innovation, Technological Opportunity, and Market Structure," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 586-602, July.
    30. Yang, Chih-Hai & Huang, Chia-Hui & Hou, Tony Chieh-Tse, 2012. "Tax incentives and R&D activity: Firm-level evidence from Taiwan," Research Policy, Elsevier, vol. 41(9), pages 1578-1588.
    31. Breschi, Stefano & Malerba, Franco & Orsenigo, Luigi, 2000. "Technological Regimes and Schumpeterian Patterns of Innovation," Economic Journal, Royal Economic Society, vol. 110(463), pages 388-410, April.
    32. Hall, Bronwyn & Van Reenen, John, 2000. "How effective are fiscal incentives for R&D? A review of the evidence," Research Policy, Elsevier, vol. 29(4-5), pages 449-469, April.
    33. Austin Nichols, 2008. "Erratum and discussion of propensity-score reweighting," Stata Journal, StataCorp LP, vol. 8(4), pages 532-539, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:nea:journl:y:2017i:34:p:59-93 is not listed on IDEAS
    2. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:tik:inowpp:20150424. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (H&kon Normann). General contact details of provider: http://edirc.repec.org/data/tkuiono.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.