R&D tax incentives in EU countries: Does the impact vary with firm size?”,

Publication date: 31 Jul 2018 | Publication type: Journal article/book/chapter | Theme: Trade, Investment & Productivity | NIESR Author(s): Venturini, F | External Author(s): Sterlacchini, A | Journal: Small Business Economics No. Forthcoming | Pages: 1-22 | Publisher: Springer-Verlag, London

This paper studies the effect of R&D tax incentives on the research activity of manufacturing firms based in France, Italy, Spain and the UK, over the period 2007–2009. Using a matching procedure, we show that, in all the examined countries but Spain, R&D tax incentives induced a statistically significant increase in the intensity of R&D expenses over sales. However, this effect is driven only by the behaviour of small firms. By assessing the benefit-cost ratio of R&D tax policies, we find evidence of substantial additional effects in Italy and the UK.