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FORFI-Kunnsk.gr.l.f.forskn.innov.pol

R&D Policy by Sector: A Cross-Country Investigation

Awarded: NOK 3.0 mill.

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More than 20 OECD countries currently support private innovation activities by means of R&D tax incentives. Recent empirical studies indicate that this type of R&D policy tends to have stronger additionality effects for SMEs and for companies that did not previously undertake R&D activities. By contrast, additionality effects are substantially lower for large enterprises and for companies that were already previously engaged in R&D activities. This leads to ask: do the effects of R&D tax incentives vary systematically by sector? This new research question is motivated by the proposition that 'sectors matter': firms in different industries of the economy differ substantially in terms of their R&D intensity, innovation strategies and technological perform ance. It is therefore reasonable to argue that the additionality effects of public R&D on firms' innovative activities and performance will also systematically differ by sector. Our project studies this unexplored question. It carries out a set of empiri cal analyses, combining micro-econometric and qualitative methods of research, to analyze the effectiveness of R&D policy on firms' innovation efforts and performance, study the extent to which these vary across industries, and discuss how R&D tax incenti ves schemes could be re-designed in order to take the sectoral dimension into account. A cross-country comparison between Norway, UK, France, Italy and Portugal will also enable an investigation of how national systems and country-specific characteristi cs shape the effects of R&D policies. This five-country comparison will serve as the basis for a future extension of this project to a larger EU context.

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FORFI-Kunnsk.gr.l.f.forskn.innov.pol

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