Tax incentives and firm size: effects on private R&D investment in Spain
Ester Martínez-Ros () and
Pierre Mohnen ()
No 2014-081, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)
The use of fiscal policy instruments to stimulate private RD is widespread and important in some countries like Spain. In this paper we explore the effectiveness of RD tax incentives on knowledge capital accumulation in Spanish manufacturing firms using an unbalanced panel and compare the estimates based on claimed and claimable tax reductions. We find that while large firms use the programme more than small ones, the impact of the programme measured by the price elasticity is smaller for large firms than for SMEs. The price elasticities are higher when the ex-ante claimable tax reductions rather than the ex-post actually claimed tax eductions are used to compute the user cost of RD.
Keywords: Business Taxes and Subsidies; Fiscal Policies and Behavior of Economic Agents; Management of Technological Innovation and R&D (search for similar items in EconPapers)
JEL-codes: H25 H32 O32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-ino, nep-pub and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2014081
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