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

Paula Faria (), Francisco Vitorino da Silva Martins () and Elísio Fernando Moreira Brandão ()
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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

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: 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.

Keywords: R&D; tax incentives; economic growth; econometric analysis in panel data (search for similar items in EconPapers)
JEL-codes: C23 H20 H3 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-11
New Economics Papers: this item is included in nep-acc, nep-eur, nep-fdg, nep-ino and nep-pbe
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:442

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