R&D employment effects of financial slack generated by R&D tax exemption: The importance of firm‐level contingencies

This paper focuses on R&D employment effects due to financial slack generated by an R&D tax exemption scheme in Belgium. The tax exemption is granted without firm‐level requirements, which facilitates testing firm‐level contingencies on the influence of the generated financial slack. We find...

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Bibliographic Details
Published in:R & D management 2022-01, Vol.52 (1), p.38-49
Main Authors: Teirlinck, Peter, Spithoven, André, Bruneel, Johan
Format: Article
Language:English
Subjects:
Employment
Tax exemptions
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Summary:This paper focuses on R&D employment effects due to financial slack generated by an R&D tax exemption scheme in Belgium. The tax exemption is granted without firm‐level requirements, which facilitates testing firm‐level contingencies on the influence of the generated financial slack. We find that R&D employment effects increase with the level of the R&D tax exemption related to financial slack resources and that this positive relation is more outspoken for older firms and for firms with an intermediate share of R&D tax exemptions in the overall mix of R&D policy support. No effects are found for firm size and its R&D intensity. These findings suggest targeting the R&D tax exemption support according to firm characteristics to obtain longer term R&D employment effects. The focus on R&D employment adds to the literature on the evaluation of R&D policies which is largely oriented toward R&D expenditure and innovation outputs.
ISSN:0033-6807
1467-9310
DOI:10.1111/radm.12472