Dipping in the policy mix: Do R&D subsidies foster behavioral additionality effects of R&D tax credits?

Daniel Neicu, Peter Teirlinck and Stijn Kelchtermans

Economics of Innovation and New Technology, 2016, vol. 25, issue 3, 218-239

Abstract: We analyze how behavioral additionality effects of wage-based R&D tax credits are influenced by the firm's joint use of R&D subsidies. Using matching estimators and a multivariate probit analysis of cross-sectional survey data on Belgian firms, we find that R&D subsidies induce tax credit users to focus more strongly on research relative to development and to accelerate the execution of R&D projects. To a slightly lesser extent, we also find size effects, firms scaling up current R&D or initiating additional projects. Overall, these findings suggest that companies that benefit from the ‘policy mix’ respond more strongly to R&D tax credits and use the tax-exempted resources to adopt a more strategic approach to R&D.

Date: 2016
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:25:y:2016:i:3:p:218-239

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DOI: 10.1080/10438599.2015.1076192

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