On the impact of public policies and wage formation on business investment in research and development

Buyse, Tim; Heylen, Freddy; Schoonackers, Ruben

doi:10.1016/j.econmod.2019.09.022

Cited by 7 publications

(4 citation statements)

References 30 publications

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“…Along the same lines, the results found by Westmore (2014) after looking at 19 OECD countries suggest that generous R&D tax incentives increase the productivity of R&D activities in terms of the number of patents. Buyse et al. (2020) found similar results, as tax incentives also proved effective in stimulating R&D activities in 14 OECD countries over the period 1981–2012.…”

Section: Theoretical Frameworksupporting

confidence: 55%

“…In this sense, as governments try to mitigate the disparities between private and social returns to knowledge and technology creation by stimulating R&D activities, assessing the real effectiveness of policies to promote innovation activities becomes crucial. This is particularly true when it is necessary to restore the sustainability of public finances (Buyse et al. , 2020).…”

Section: Introductionmentioning

confidence: 99%

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R&D tax incentives and innovation: unveiling the mechanisms behind innovation capacity

Walter

Au‐Yong‐Oliveira

Veloso

et al. 2022

JAMR

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PurposeThere is a scarcity of empirical evidence in the literature on the chain of causality involving tax incentives for Research and Development (R&D) activities and their subsequent transformation into innovation. This study aims to assess the influence of R&D tax incentives on the organizational attributes of Portuguese firms to identify how they are converted into innovation.Design/methodology/approachA structural research model consisting of 339 companies that benefited from the Fiscal Incentive System supporting R&D in Enterprises, during the period from 2013 to 2016, was developed. This was done to assess the role of R&D tax incentives on the organizational attributes that form the innovation capacity. The model was validated using the multivariate statistical technique of structural equation modeling with partial least squares estimation (partial least squares structural equation modeling – PLS-SEM).FindingsThe results found suggest that although it is not possible to unequivocally identify the mechanisms used to convert tax incentives into innovation, it is possible to conclude that they play an important spillover effect for the construction and strengthening of organizational attributes. These form the basis of innovation capacity, to the extent that they positively influence the firms’ total assets, equity, liabilities, number of employees and sales. Hence, contributions are brought to both the literature on tax incentives and the general literature on innovation.Originality/valueFor policymakers, the evidence points to the fact that in addition to the incentives provided, novel mechanisms need to be established to help firms develop their absorptive capacity. The objective is to effectively convert the incentives received into innovation through the organizational attributes analyzed. From the firms’ point of view, the results found suggest that tax incentives act as a catalyst for making R&D investments. Additionally, there is an influence on employability, which effectively enhances the chances of innovation in the long run. Tax incentives received by Portuguese firms also have the effect of promoting economic dynamism – by enhancing the following: investments in infrastructure, the hiring of employees and the increasing of sales, generating positive externalities for both firms and society.

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Section: Theoretical Frameworksupporting

confidence: 55%

Section: Introductionmentioning

confidence: 99%

R&D tax incentives and innovation: unveiling the mechanisms behind innovation capacity

Walter

Au‐Yong‐Oliveira

Veloso

et al. 2022

JAMR

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“…The evaluation of the performance of public investments is a complex process in which the owners and administrators are involved on the one hand, but especially the beneficiaries and users of the newly created infrastructures. In order to increase the performance of public investments, the collaboration of the public sector with the private sector facilitates the exchange of knowledge and is timely for the research and development of these sectors (Buyse, Heylen and Schoonackers, 2020). If from a legislative point of view, the implementation part of investment projects is the best regulated (HG 907/2016, HG 28/2008, HG 225/2014, GEO 88/2013, Law 500/2002, the issue of substantiation (ex-ante) and that of ensuring sustainability (ex-post) remain within the scope of individual and sometimes subjective decisions, subject to temporal constraints and needs, without being correlated at a strategic level in terms of performance and real contribution to development economic-social.…”

Section: Review Of the Scientific Literaturementioning

confidence: 99%

Challenges Regarding the Performance of Public Investment Projects

Dima¹,

Rădulescu²,

Petrescu³

et al. 2023

New Trends in Sustainable Business and Consumption

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Investments, approached as a factor influencing the future, have an essential role in economic growth and development by stimulating the production process and by creating new, high-performing structures that are correlated with the specific needs of individuals and society. From the point of view of access to resources, but also of economic-social competition, economic development generates a higher level of performance, certified on the basis of qualitative and quantitative evaluation processes. In this context, the analysis system of investment projects must be based on operational principles and instruments with medium and long-term impact, capable of aligning with strategic visions. In this paper, based on the research carried out in the specialized literature and the analyzed studies regarding public investments, we identify the current challenges regarding the performance of public investment projects and propose a series of criteria for evaluating the performance of public investments and a sequence of stages to ensure the elimination of non-performing projects at the local, regional and national level. The results of the present research reveal the inadequate prioritization of public investments to ensure adequate sustainability and offer us the opportunity to develop new research directions in the following works in which we will analyze the impact that inadequate prioritization has on the sustainability of local, regional and national communities.

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“…On the other hand, studies conducted by the Organisation for economic Co-operation and Development (OeCD) indicate that innovation performance can be influenced by tax incentives, government, R&D expenditure, the quality of higher education, and business and university collaboration. 43 Public policy can apply the heterogeneity of alternative fiscal incentives and their design. OeCD work suggests that the effectiveness of tax changes depends on the existing tax structure and the proportion of credit-constrained agents, with large differences across countries.…”

Section: Fostering Innovation By Governmentmentioning

confidence: 99%

Fiscal Burden as a Determinant of Innovation Performance in the CEE Countries

Felis

Bernardelli

Jamrozy

et al. 2022

East European Politics and Societies: and Cultures

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This article aims at finding a relationship between the degree of fiscalism and innovation in eleven countries in Central and Eastern Europe (CEE). The article uses clustering algorithms to divide countries into groups, with the most similar features in a multidimensional space generated by values of adopted indices, irrespective of fiscalism and innovation. Econometric modelling based on panel data was used to identify directions and the strength of the relationship between different variables. The article finds that fiscalism and innovation performance are closely interrelated. The article uses selected (limited) indices to exhibit the relation between fiscalism and innovation. The impact of tax competition may be used to give a broader perspective on this relation. The implication for the public policy is that high value of tax-to-GDP (gross domestic product) coexists with low labour costs and entrepreneurs’ attitude to investment in innovation. It is among the first articles to exhibit a relation between innovation and fiscalism in the CEE countries. In addition, the article uniquely uses clustering methods combined with the econometric panel model.

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On the impact of public policies and wage formation on business investment in research and development

Cited by 7 publications

References 30 publications

R&D tax incentives and innovation: unveiling the mechanisms behind innovation capacity

R&D tax incentives and innovation: unveiling the mechanisms behind innovation capacity

Challenges Regarding the Performance of Public Investment Projects

Fiscal Burden as a Determinant of Innovation Performance in the CEE Countries

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