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The effects of state R&D tax credits in stimulating private R&D expenditure: A cross‐state empirical analysis
Author(s) -
Wu Yonghong
Publication year - 2005
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20138
Subject(s) - subsidy , state (computer science) , economics , public economics , empirical research , tax credit , business , philosophy , epistemology , algorithm , computer science , market economy
Abstract This is a cross‐state empirical study which examines the effects of state research and development (R&D) tax credits on private R&D expenditure in the states. Other explanatory variables include federal R&D subsidies, public services in higher education and R&D‐targeted programs as well as other control variables. The statistical result shows that the establishment of state R&D credit programs is effective in stimulating more industrial R&D expenditure. In addition, state services in higher education and R&D‐targeted programs also matter in private decision of R&D investment. This policy assessment sends a positive message to state policymakers because it shows the great potential in using R&D policy instruments to promote innovation‐based economic development. © 2005 by the Association for Public Policy Analysis and Management