Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212401 
more recent Version: 
Year of Publication: 
2017
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 30/2017
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We conduct a welfare analysis of R&D subsidies and tax credits using a model of innovation policy in corporating externalities, limited R&D participation and finanial market imperfetions. We estimate the model using R&D projet level data from Finland. The optimal R&D tax credit rate (0.24) is lower than the average R&D subsidy rate (0.36). The intensive, not the extensive margin of R&D is important for poliy. Tax credits and subsidies inrease R&D investments and spillovers compared to laissez-faire but to levels below the first best. R&D support policies don't improve welfare.
JEL: 
O38
O31
L53
C31
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-189-4
Additional Information: 
A revised version published on 18 Jan 2022 is available as BoF DP 2/2022.
Document Type: 
Working Paper

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