Abstract:Norwegian business spending on R&D is low by OECD standards. To stimulate business R&D, in 2002 the Norwegian government introduced a tax-based incentive, SkatteFUNN. We analyze the effects of SkatteFUNN on the likelihood of innovating and patenting. Using a rich database for Norwegian firms, we find that projects receiving tax credits result in the development of new production processes and to some extent the development of new products for the firm. Firms that collaborate with other firms are more likely to be successful in their innovation activities. However, the scheme does not appear to contribute to innovations in the form of new products for the market or patenting.

Many people have contributed to this dissertation with kindly offered advice, encouragement, inspiration, support, and friendship. First of all, I wish to thank my supervisor Jarle Møen and cosupervisor Erik Biørn, for patience, supporting advice and thoughtful comments. Special thanks to my co-authors, in alphabetical order, Ådne Cappelen, Øivind A. Nilsen, Arvid Raknerud and Terje Skjerpen for inspiring and insightful discussions. All of them have contributed in numerous ways to this dissertation and have improved my ability to carry out economic research. It has been an honour and a pleasure to work with them. This dissertation is the result of my work on different projects in the Research Department of Statistics Norway. I thank my colleagues in the Research Department for providing an inspiring and pleasant working environment. In particular, I wish to thank, in chronological order, Torbjørn Haegeland, Mads Greaker and Erik Fjaerli, who all have been the head of research units where I have been employed, for embarking with me on this doctoral journey and for providing an opportunity to fulfil it. I also would like to thank the department of Economics, University of Oslo, for having me as a Ph.D. student; the Norwegian School of Economics in Bergen for having me as a guest during spring 2009; and the organizers (the Centre of European Economic Research, ZEW) and participants at the Competition and Innovation Summer School in 2012 for providing a professional and inspiring arena for sharing experience and discussing preliminary work. I acknowledge the financial support from the Research Council of Norway (for the writing of the first, third and fourth papers) and from the Norwegian Ministry of Local Government and Modernisation (for the writing of the final paper). Finally, I thank my family and friends for their love and support. Special thanks to my mother Elena for always believing in me, to my father Vladimir for always challenging me, to my husband Håvard for always supporting me, and to my two children, Katarina and Henrik, for making my doctoral journey more meaningful. Oslo, April 2015 Marina Rybalka Essay 3: The effects of R&D tax credits on patenting and innovations With Ådne Cappelen and Arvid Raknerud Essay 4: Returns to public R&D grants and subsidies With Ådne Cappelen and Arvid Raknerud Essay 5: The innovative input mix: Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services

In a growth accounting context one usually constructs a quality adjusted index of labor services by aggregating over prede…ned groups of workers, using the groups'relative wage bills as weights. In this article we suggest a method based on decomposing individual predicted wages into a skill-related part and a part unrelated to skill, where the former consists of both observed and unobserved components. The predicted wages, associated with individual skill attributes, are sorted and classi…ed into deciles. The median predicted skill-related wage in each decile is used to construct an alternative skill-adjusted index of labor services. We …nd that Total Factor Productivity (TFP) growth decreases signi…cantly when using the latter method. This means that when using the alternative method one explains more of the growth in labor productivity than what a more traditional labor quality adjustment procedure does.JEL classi…cation: C23, D24, J24, J31

We find that the Norwegian R&D tax credit scheme introduced in 2002 mainly works as intended. The scheme is cost-effective and it is used by a large number of firms. It stimulates these firms to invest more in R&D, and, in particular, the effect is positive for small firms with little R&D experience. The returns on the R&D investments supported by the scheme are positive and generally not different from the returns to other R&D investments. We have found examples of what can be interpreted as tax motivated adjustments to the scheme, but to some extent this must be accepted as a cost to subsidy and support schemes intended for use by a large number of economic agents. This is particularly so when attempts are made to keep administrative expenditures and control routines at a low level.

According to a strong and diversified theoretical framework, innovation is one of the usual suspects in defining differences in firm performance. Understanding the diversity that exists within the population of innovative firms is essential for developing appropriate innovation policies. Our study explored the diversity of innovation patterns among Norwegian firms included in the 2018 Community Innovation Survey (CIS2018). By applying factor analysis to a wide array of survey variables and a large sample of firms, we identified eleven typical approaches to innovation, which connect innovation inputs and outputs at the firm level. A main outcome of our study is a novel fine-grained view of innovation as a multifaceted concept. Our research path helps us to find commonalities in innovation behavior across industries and, as a consequence, to better isolate those innovation patterns that differentiate industries from one another. We also show the relation between firm size, on one hand, and each of the firm scores associated to the eleven typical approaches to innovation, on the other hand, thus uncovering ways in which small firms may survive in sectors dominated by large firms.