Tax incentives on research and development (R&D) are an important and widely used policyinstrument to elevate business enterprise expenditure on R&D (BERD). In times of economicdistress, firms tend to reduce their R&D investments, although it is crucial for long-termeconomic growth to keep those at a stable level. To evaluate the suitability for such policygoals, this paper investigates the relationship between the pre-existing level of R&D taxincentives and BERD during times of economic crisis.Country-level data from the OECD member states is used to investigate the mentionedrelationship for three times of economic distress: the early 2000s recession, the GreatRecession, and the European sovereign debt crisis. Separate cross-sectional data sets arecreated and analysed with a linear regression approach. The results show a significant andpositive relationship only for the early 2000s recession period and thereby do not provide clearevidence of an increased BERD resilience as result of higher pre-existing tax incentives.Thereby, these findings indicate the need for different policy measures to be applied for anautomatic or short-term stabilization of BERD in times of economic distress.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:du-37788 |
| Date | January 2021 |
| Creators | Bruns, Martin |
| Publisher | Högskolan Dalarna, Institutionen för kultur och samhälle |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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