Analyzing the Impact of R&D Tax Incentive Policy on Firm Innovations in OECD Countries
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F24%3A39922373" target="_blank" >RIV/00216275:25410/24:39922373 - isvavai.cz</a>
Result on the web
<a href="https://editorial.upce.cz/1804-8048/32/1/1939" target="_blank" >https://editorial.upce.cz/1804-8048/32/1/1939</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.46585/sp32011939" target="_blank" >10.46585/sp32011939</a>
Alternative languages
Result language
angličtina
Original language name
Analyzing the Impact of R&D Tax Incentive Policy on Firm Innovations in OECD Countries
Original language description
R&D tax incentives have gained popularity among the OECD countries as a means to improve innovation. However, the impact of R&D tax incentives on innovation has not been commensurate with the tax incentives given. This study aims to analyze the role of R&D tax incentives on firm innovation. Data on innovation and government support in 16 OECD countries was drawn from the Global Economy (World Bank Data) database. Three estimation techniques, Pooled Ordinary Least Square (OLS) regression analysis, Fixed effect and Random effect models are employed in estimating the relationship between R&D tax incentives and firm innovation. The first hypothesis found that tax incentives directly improve firm innovation, hence tax incentives are a significant policy tool in OECD countries, encouraging firms to invest more in R&D activities. The second hypothesis is rejected. The third hypothesis found that R&D tax incentive is displaced by R&D intensity in full sample analysis but not in groups with high innovation performance. The study proved the importance of skilled R&D personnel in maximizing the benefit of tax credits. The capacity of R&D personnel can complement to R&D tax credit for innovation performance support schemes by the government. The study's findings indicate that while R&D tax incentives are a strong indicator of a firm's innovative activities, they tend to overshadow the R&D intensity. However, this is not observed in countries that exhibit high levels of innovation performance. The study concludes that even though R&D tax incentives are a great predictor of firm innovation, R&D tax incentives are crowded R&D intensity but not in the case of high innovation performing countries. Policymakers should consider investing in human capital such as education and training to enhance the effectiveness of R&D tax credits in OECD countries.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50200 - Economics and Business
Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Scientific Papers of the University of Pardubice - Series D, Faculty of Economics and Administration
ISSN
1211-555X
e-ISSN
1804-8048
Volume of the periodical
32
Issue of the periodical within the volume
1
Country of publishing house
CZ - CZECH REPUBLIC
Number of pages
20
Pages from-to
1939
UT code for WoS article
001274552500001
EID of the result in the Scopus database
2-s2.0-85199398616