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R&D employment effects of financial slack generated by R&D tax exemption: The importance of firm‐level contingencies
Author(s) -
Teirlinck Peter,
Spithoven André,
Bruneel Johan
Publication year - 2022
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/radm.12472
Subject(s) - tax exemption , economics , finance , business , monetary economics , labour economics , law , political science
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.