Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/221819 
Year of Publication: 
2020
Series/Report no.: 
EconPol Policy Report No. 20
Publisher: 
ifo Institute - Leibniz Institute for Economic Research at the University of Munich, Munich
Abstract: 
This policy report provides an overview of firm R&D support policies used by European countries, reviews the empirical evidence on the effectiveness of these policies, and discusses implications for policy. Existing literature suggests that firm R&D support policies stimulate private R&D within a country and that in most cases, the positive impact of government support is stronger on smaller firms. Recent evidence also indicates that some of the policy instruments, such as patent box policies, are tools that multinationals use to lower their total tax bill through profit shifting. Despite the data issues that limit the ability to quantify the impact of tax incentives on global R&D, these recent findings together suggest that R&D support policies indeed promote national R&D activities. But governments also use some of these tax instruments to compete for R&D and mobile tax bases, which makes them less cost-effective in stimulating aggregate private sector R&D.
Subjects: 
R&D
Innovation
Patent Boxes
R&D Tax Credit
Public Subsidies
Public R&D
Document Type: 
Research Report

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