The Effect of Fiscal Incentives on Business R&D

Valeria Bucci

doi:doi:10.11648/j.ijefm.20190702.11

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The Effect of Fiscal Incentives on Business R&D

Valeria Bucci

Published in International Journal of Economics, Finance and Management Sciences (Volume 7, Issue 2)

Received: 19 February 2019 Accepted: 30 March 2019 Published: 18 April 2019

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Abstract

This paper analyses the determinants of business R&D choices. In particular, it provides new empirical evidence on the effectiveness of fiscal policies aimed at driving companies to invest in R&D activity. By computing two very accurate proxies for firm-specific tax savings achievable when investing in R&D, and by exploiting exogenous changes in fiscal legislation in Italy, this study investigates if fiscal considerations affect companies’ choice to invest in R&D and how much to spend in such activity. The empirical analysis is based on an unbalanced panel data set composed of 163 Italian companies, covering the years 2004-2010. A two-step approach has been implemented, by combining a probit and a tobit estimation model. The results deliver strong empirical evidence that fiscal incentives significantly affect business R&D choices, by one side, increasing companies’ likelihood to invest in R&D, and, by the other, fostering companies’ R&D expenditure.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 7, Issue 2)
DOI	10.11648/j.ijefm.20190702.11
Page(s)	37-44
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Innovation, R&D, Fiscal Incentives, Marginal Tax Savings

References

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APA Style

Valeria Bucci. (2019). The Effect of Fiscal Incentives on Business R&D. International Journal of Economics, Finance and Management Sciences, 7(2), 37-44. https://doi.org/10.11648/j.ijefm.20190702.11

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ACS Style

Valeria Bucci. The Effect of Fiscal Incentives on Business R&D. Int. J. Econ. Finance Manag. Sci. 2019, 7(2), 37-44. doi: 10.11648/j.ijefm.20190702.11

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AMA Style

Valeria Bucci. The Effect of Fiscal Incentives on Business R&D. Int J Econ Finance Manag Sci. 2019;7(2):37-44. doi: 10.11648/j.ijefm.20190702.11

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@article{10.11648/j.ijefm.20190702.11,
  author = {Valeria Bucci},
  title = {The Effect of Fiscal Incentives on Business R&D},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {7},
  number = {2},
  pages = {37-44},
  doi = {10.11648/j.ijefm.20190702.11},
  url = {https://doi.org/10.11648/j.ijefm.20190702.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20190702.11},
  abstract = {This paper analyses the determinants of business R&D choices. In particular, it provides new empirical evidence on the effectiveness of fiscal policies aimed at driving companies to invest in R&D activity. By computing two very accurate proxies for firm-specific tax savings achievable when investing in R&D, and by exploiting exogenous changes in fiscal legislation in Italy, this study investigates if fiscal considerations affect companies’ choice to invest in R&D and how much to spend in such activity. The empirical analysis is based on an unbalanced panel data set composed of 163 Italian companies, covering the years 2004-2010. A two-step approach has been implemented, by combining a probit and a tobit estimation model. The results deliver strong empirical evidence that fiscal incentives significantly affect business R&D choices, by one side, increasing companies’ likelihood to invest in R&D, and, by the other, fostering companies’ R&D expenditure.},
 year = {2019}
}

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TY  - JOUR
T1  - The Effect of Fiscal Incentives on Business R&D
AU  - Valeria Bucci
Y1  - 2019/04/18
PY  - 2019
N1  - https://doi.org/10.11648/j.ijefm.20190702.11
DO  - 10.11648/j.ijefm.20190702.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 37
EP  - 44
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20190702.11
AB  - This paper analyses the determinants of business R&D choices. In particular, it provides new empirical evidence on the effectiveness of fiscal policies aimed at driving companies to invest in R&D activity. By computing two very accurate proxies for firm-specific tax savings achievable when investing in R&D, and by exploiting exogenous changes in fiscal legislation in Italy, this study investigates if fiscal considerations affect companies’ choice to invest in R&D and how much to spend in such activity. The empirical analysis is based on an unbalanced panel data set composed of 163 Italian companies, covering the years 2004-2010. A two-step approach has been implemented, by combining a probit and a tobit estimation model. The results deliver strong empirical evidence that fiscal incentives significantly affect business R&D choices, by one side, increasing companies’ likelihood to invest in R&D, and, by the other, fostering companies’ R&D expenditure.
VL  - 7
IS  - 2
ER  -

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Author Information

Valeria Bucci

Department of Economics, University of Salento, Lecce, Italy and Sose SpA, Rome, Italy

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APA Style

Valeria Bucci. (2019). The Effect of Fiscal Incentives on Business R&D. International Journal of Economics, Finance and Management Sciences, 7(2), 37-44. https://doi.org/10.11648/j.ijefm.20190702.11

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ACS Style

Valeria Bucci. The Effect of Fiscal Incentives on Business R&D. Int. J. Econ. Finance Manag. Sci. 2019, 7(2), 37-44. doi: 10.11648/j.ijefm.20190702.11

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AMA Style

Valeria Bucci. The Effect of Fiscal Incentives on Business R&D. Int J Econ Finance Manag Sci. 2019;7(2):37-44. doi: 10.11648/j.ijefm.20190702.11

Copy | Download

@article{10.11648/j.ijefm.20190702.11,
  author = {Valeria Bucci},
  title = {The Effect of Fiscal Incentives on Business R&D},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {7},
  number = {2},
  pages = {37-44},
  doi = {10.11648/j.ijefm.20190702.11},
  url = {https://doi.org/10.11648/j.ijefm.20190702.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20190702.11},
  abstract = {This paper analyses the determinants of business R&D choices. In particular, it provides new empirical evidence on the effectiveness of fiscal policies aimed at driving companies to invest in R&D activity. By computing two very accurate proxies for firm-specific tax savings achievable when investing in R&D, and by exploiting exogenous changes in fiscal legislation in Italy, this study investigates if fiscal considerations affect companies’ choice to invest in R&D and how much to spend in such activity. The empirical analysis is based on an unbalanced panel data set composed of 163 Italian companies, covering the years 2004-2010. A two-step approach has been implemented, by combining a probit and a tobit estimation model. The results deliver strong empirical evidence that fiscal incentives significantly affect business R&D choices, by one side, increasing companies’ likelihood to invest in R&D, and, by the other, fostering companies’ R&D expenditure.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - The Effect of Fiscal Incentives on Business R&D
AU  - Valeria Bucci
Y1  - 2019/04/18
PY  - 2019
N1  - https://doi.org/10.11648/j.ijefm.20190702.11
DO  - 10.11648/j.ijefm.20190702.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 37
EP  - 44
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20190702.11
AB  - This paper analyses the determinants of business R&D choices. In particular, it provides new empirical evidence on the effectiveness of fiscal policies aimed at driving companies to invest in R&D activity. By computing two very accurate proxies for firm-specific tax savings achievable when investing in R&D, and by exploiting exogenous changes in fiscal legislation in Italy, this study investigates if fiscal considerations affect companies’ choice to invest in R&D and how much to spend in such activity. The empirical analysis is based on an unbalanced panel data set composed of 163 Italian companies, covering the years 2004-2010. A two-step approach has been implemented, by combining a probit and a tobit estimation model. The results deliver strong empirical evidence that fiscal incentives significantly affect business R&D choices, by one side, increasing companies’ likelihood to invest in R&D, and, by the other, fostering companies’ R&D expenditure.
VL  - 7
IS  - 2
ER  -

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