Tax Policy and R&D Investment by Australian Firms

Russell Thomson ()

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: This paper examines the determinants of investment in R&D by Australian firms, with a focus on the role of tax policy. The analysis considers an unbalanced panel of financial data of about 500 large Australian firms between 1990 and 2005. The principal result is that no evidence can be found that the user cost of R&D is an important determinant of firm R&D investment decisions. A corollary is that there is no evidence that tax incentives are an effective policy tool. Growth in sales is found to be the primary determinant of R&D investment, which is interpreted as evidence of the central role of demand conditions.

Keywords: R&D investment; R&D tax policy; innovation policy; Australian R&D (search for similar items in EconPapers)
JEL-codes: H25 H32 O32 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2009-04
New Economics Papers: this item is included in nep-ino
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Related works:
Journal Article: Tax Policy and R&D Investment by Australian Firms (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2009n10

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