The Effects of Public Subsidies on R&D Employment: Evidence from OECD Countries

Russell Thomson () and Paul Jensen

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

Abstract: Existing empirical evidence suggests that public subsidies and fiscal incentives have a positive effect on the amount of private R&D expenditure. However, most studies have failed to address the possibility at least some of this increase may simply reflect the fact that R&D workers are being paid higher wages. Such an omission may imply that past research has over-estimated the effectiveness of R&D tax concessions. In the absence of widely-available R&D deflators, we consider the impact of a range of public subsidies on the number of fulltime equivalent workers employed in R&D (i.e., researchers) in the business sector. Our findings strongly support the effectiveness of both direct subsidies and fiscal incentives.

Keywords: innovation policy; R&D tax credits; R&D investment (search for similar items in EconPapers)
JEL-codes: H25 O38 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2010-07
New Economics Papers: this item is included in nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2010n11

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