Tax incentives and direct support for R&D : What do firms use and why?
Busom i Piquer, Isabel (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)
Corchuelo Martínez-Azua, Beatriz (Universidad de Extremadura)
Martinez Ros, Ester (Universidad Carlos III de Madrid)
Universitat Autònoma de Barcelona. Departament d'Economia Aplicada

Date:	2013
Description:	50 p.
Abstract:	This paper studies whether firms' use of R&D subsidies and R&D tax incentives is correlated to two sources of underinvestment in R&D, financing constraints and appropriability. We find that financially constrained SMEs are less likely to use R&D tax credits and more likely to obtain subsidies. SMEs using legal methods to protect their intellectual property are more likely to use tax incentives. Results are ambiguous for large firms. For both having previous experience in R&D increases the likelihood of using tax incentives, while it reduces the likelihood of using exclusively subsidies, suggesting that the latter induce entry into R&D. Results imply that direct funding and tax credits do not have the same ability to address each source of R&D underinvestment, and that on average subsidies may be better suited than tax credits at least for SMEs. From a policy perspective these tools may be complements rather than substitutes.
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Language:	Anglès
Series:	Departament d'Economia Aplicada. Documents de treball
Series:	Document de treball (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada) ; 1212
Document:	Working paper
Subject:	Incentius fiscals ; Subvencions ; Investigació

50 p, 487.1 KB

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Research literature > Working papers > Department of Applied Economics. Working papers