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Specifically, the additionality effect of R&D tax credits is on average stronger for SMEs, firms in the service sectors, and firms in low-tech sectors in countries with an incremental scheme.
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Do the additionality effects of R&D tax credits vary across sectors?
In the domain of additionality effects of R&D subsidies, this paper is the first to apply the CDiDRCS method.
The study estimates input and output additionality effects of R&D tax credits in each of these economies, and it investigates how these effects differ across sectors characterized by different R&D orientation and competition conditions.
The results point out that firms in industries with high R&D orientation have on average higher propensity to apply to R&D fiscal incentives schemes and stronger input and output additionality effects.
An evaluation of public R&D subsidy on private R&D expenditures in France during the period 1993 2009 revealed a considerable reduction in the growth of private R&D expenditure among medium-high subsidy recipients of R&D tax credits, whereas additionality effects were found for a few top beneficiary companies (above EUR 10 million).
The additionality issue has been taken into account in the methodology presented by considering the sequestration potential of both plantations and natural ecosystems.
Main conditions include additionality (mitigation effects "with project" must be additional to what would have happened "without project"); leakage (project mitigation effects must not be offset by project impacts outside the accounting boundary); and contribution to sustainable development (to be demonstrated according to host country rules).
'First-order' additionalities represent direct firm-level R&D subsidies, whereas 'second-order' additionalities result from knowledge spill-overs, horizontal knowledge exchanges between firms, and from other meso- or community-level effects.
We find evidence of either no additionality or substitution effects between public and private R&D expenditure.
This paper examines the outcome additionality of prestigious early-stage government subsidies.
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