Liquidity and Firm Response to Fiscal Stimulus
Antonio Acconcia and
Claudia Cantabene
CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy
Abstract:
A stimulus programme allowed .rms in Italy to receive a tax credit for R&D expenditure in 2009. We show large heterogeneity in the .rm response. Among .rms that usually smooth R&D through time, the tax credit did not have any effect. Among traditional .rms, the response was mainly dependent on the amount of internal liquidity. Firms with relative large cash holdings raised R&D with respect to 2008 while .rms with low levels of cash did not. The latter mainly used the tax credit to mitigate the negative impact of the credit crunch.
Keywords: Credit Crisis; Heterogeneity; Liquidity; R&D; Tax Credit. (search for similar items in EconPapers)
JEL-codes: D92 E22 E62 H32 (search for similar items in EconPapers)
Date: 2015-02-28, Revised 2016-02-16
New Economics Papers: this item is included in nep-ino, nep-pbe and nep-sbm
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Citations:
Published in Economic Journal, 2018, 128(613), pp. 1759-1785
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Related works:
Journal Article: Liquidity and Firms’ Response to Fiscal Stimulus (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:392
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