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The Impact of Public Funding and Tax Incentives on Russian Firms: Additionality Effects Evaluation

Yuri Simachev (), Mikhail Kuzyk () and N. Zudin
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N. Zudin: Center for Strategic Research, Moscow, Russia

Journal of the New Economic Association, 2017, vol. 34, issue 2, 59-93

Abstract: In the following study a microeconomic assessment of the implementation results of tax and financial policies aimed at stimulating firms' innovation activity is carried out. The approach used is based on the provisions of the additionality concept. The authors systematized and summarized the results of more than thirty empirical studies examining the additionality effects of tax and financial incentives for innovation. Obtained results suggest that financial support more often leads to significant positive results, mainly to the growth of company's investment in new equipment, the increase in the production volume of innovative products and the acceleration of projects implementation. However, the use of tax instruments is much less likely to crowd out private investment. Generally, public support rather poorly stimulates the development of the science-business cooperation.

Keywords: promotion of innovation activities; public policy evaluation; additionality concept; firms' innovation behavior; financial support; tax incentives (search for similar items in EconPapers)
JEL-codes: O38 H32 (search for similar items in EconPapers)
Date: 2017
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