R&D Policy by Sector: A Cross-Country Investigation (completed)
Photo: Kyrre Vigestad
About the Project
More than 20 OECD countries currently support private R&D investments through R&D tax incentives schemes, including not only advanced countries but also developing economies such as Brazil, India, China and South Africa (OECD, 2010). The widespread adoption of this type of R&D support schemes has increasingly attracted the attention of innovation scholars and fostered the development of a large stream of applied research, which investigates the effects of tax credits on firms’ R&D expenditures by making use of firm-level data.
The project on “R&D Policy by Sector” has extended this recent strand of research by investigating a new research question: do the effects of R&D tax incentives vary systematically by sector? This question is motivated by the proposition that “sectors matter”: firms in different industries of the economy differ substantially in terms of their R&D intensity, innovation strategy and technological performance. Specifically, the R&D distribution of firms varies greatly by sectors. Other sector-specific factors – such as the degree of market competition, technological opportunities, and the intensity of knowledge diffusion and spillover effects – do also differ substantially across industries. It is therefore reasonable to argue that firms’ responsiveness to fiscal incentives to R&D may vary considerably among industries.
The project studies this unexplored question by carrying out a set of empirical analyses, combining microeconometric and qualitative methods of research, to analyze the effectiveness of fiscal incentives to R&D on firms' innovation efforts and performance, study the extent to which these vary across industries, and discuss whether R&D tax incentives schemes should be re-designed in order to take the sectoral dimension into account.
R&D Policy by Sector is coordinated by TIK's Director, Fulvio Castellacci, and the project partners are as follows; TIK, NUPI, SPRU (UK), Grenoble School of Management, and Bocconi University.
This project is financed by the Norwegian Research Council, FORFI programme, 2012-2015.