Tax treatment of research and development expenditure

This study provides an overview of the tax treatment of research and development expenditure in the 25 Member States, Japan and the US. It describes both the treatment under the normal tax systems and any specific incentive schemes.European Union, taxation, company taxation

Optimal research and development expenditure : a general equilibrium approach

How much should be spent in research and development (R&D)? How should R&D vary over the business cycle? In this paper we answer both questions in the context of a calibrated dynamic general equilibrium model with Schumpeterian endogenous growth. Firstly, we demonstrate that, although the existence of distortions in a decentralized economy produces underinvestment in R&D, a simple proportional subsidy to R&D spending alone cannot restore the first best allocation. The optimal proportional R&D subsidy attains a second best allocation in which R&D spending exceeds its first best level. Secondly, we show how the observed procyclicality of R&D is socially inefficient. However, the welfare loss due to this dynamic inefficiency is much smaller than the loss due to underinvestment in R&

The Impact of Patents on Research & Development Expenditure as a Percentage of Gross Domestic Product: A Case in the U.S. and EU Economies

This paper examines the recent upward trend of patent applications and its impact on Research and Development Expenditure in the U.S. and the EU. Opening with the decline in total factor productivity in the United States, the paper focuses on the decline by analyzing the effect that patents have on research and development expenditure, taking firm size, government subsidization, and historical financial performance, into account. Patents were found to have an increasing effect on research and development expenditure decreasing rate

The Impact of a Nation’s Research and Development Expenditure On Scientific Literacy

Through pooled cross-sectional analysis of data from the OECD’s triennial Programme for International Student Assessment (PISA), we estimate the effects of a nation’s research and development expenditure on scientific literacy. Controlling for economic, educational, and demographic factors for over sixty countries between 1998 and 2015, we find that the amount of funds a nation allocates towards research and development has a positive and statistically significant association with scientific literacy. These results suggest that, along with established socioeconomic and educational determinants of scholastic achievement, the prioritization of research and development by a nation—beginning with policymakers—may function as a tacit cultural approval of science, and therefore may be auspicious to the quality and efficacy of science education

Regional financing for research and development expenditure

Following the loss of competitiveness of most European countries with respect to the other major economic powers since the 1970s, as part of its “Europe 2020” programme, the European Union has set the objective to allocate 3% of the GDP to research and development (R&D). As part of its national reform programme, Belgium decided to follow this objective. This analysis attempts to highlight this effort at the level of the Belgian federated entities according to forecast hypotheses for GDP, R&D expenditure and its distribution between the private and public sector for 2020. With respect to the hypotheses considered, the Brussels Region would only achieve 1.9% of the GDP by this time, mainly due to a lack of private R&D expenditure in the regional territory. The Flemish Region would basically reach the objective in 2020 and the Walloon Region would exceed it thanks to a significant increase in private expenditure. At national level, Belgium would reach the objective in 2020 overall, thanks to compensations, in particular in terms of private expenditure, between the Walloon and Brussels regionsSuite à la perte de compétitivité de la plupart des pays européens par rapport aux autres grandes puissances économiques depuis les années ‘70, l’Union européenne s’est fixé comme objectif, au sein de son programme « Europe 2020 », d’affecter à la recherche et développement (R&D) 3 % du PIB. La Belgique a décidé au sein de son programme national de réforme de suivre cet objectif. Cette analyse tente de mettre en évidence cet effort au niveau des entités fédérées de la Belgique sous certaines hypothèses de projections du PIB, des dépenses en R&D et de leur répartition entre secteur privé et public à l’horizon 2020. Dans le cadre des hypothèses retenues, la Région bruxelloise n’atteindrait globalement, qu’une intensité de 1,9 % du PIB à cette échéance, ce essentiellement suite une insuffisance de dépenses privées en R&D sur le territoire régional. La Région flamande atteindrait pratiquement l’objectif en 2020 et la Région wallonne le dépasserait grâce à une croissance importante de ses dépenses privées. Au niveau national, la Belgique atteindrait globalement l’objectif en 2020 grâce aux compensations, particulièrement en termes de dépenses privées, entre les régions wallonne et bruxelloise.Wegens het verlies aan concurrentiekracht van de meeste Europese landen tegenover de andere economische grootmachten sinds de jaren ’70, heeft de Europese Unie zich in haar programma “Europa 2020” tot doel gesteld 3% van het BBP te besteden aan onderzoek en ontwikkeling (O&O). België heeft in het kader van zijn nationaal hervormingsprogramma beslist om die doelstelling na te streven. Deze analyse tracht de inspanning van de deelgebieden toe te lichten aan de hand van bepaalde prognoses van het BBP, de O&O-uitgaven en de uitsplitsing ervan tussen de openbare en privésector tegen 2020. Volgens de werkhypotheses zou het Brussels Gewest tegen die deadline in totaal slechts 1,9% van zijn BBP besteden aan O&O. Dat komt vooral omdat de privé-uitgaven voor O&O op het gewestelijk grondgebied ontoereikend zijn. Het Vlaams Gewest zou de doelstelling in 2020 nagenoeg halen en het Waals Gewest zou de doelstelling overschrijden dankzij een forse toename van de privé-uitgaven voor O&O. Op nationaal niveau zou België globaal de doelstelling halen in 2020 dankzij de compensaties, vooral op het vlak van de privé-uitgaven, tussen het Waals en Brussels Gewest

Immigration and Innovation.

We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. Controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation.Innovation; Immigration; Local labour market

Immigration and Innovation

We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. Controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation.local labour market, immigration, innovation

Immigration and Innovation

We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. Controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation.Innovation; Immigration; Local labour market

Quantity versus Quality: The Impact of Environmental Disclosures on the reputations of UK plcs

The theoretical framework of this paper integrates quality-signalling theory and the resource based view of the firm to test the differential effects of the quantity and quality of environmental disclosures on the firm’s environmental reputation. Uniquely, the study uses a quality-adjusted method of content analysis, so that sentences are not merely counted but also weighted to reflect their likely significance. Investments in research and development and diversification, as potential methods of enhancing of environmental reputation, are also considered. In doing so the paper complements and extends the work of Toms (2002). The results confirm the framework and models tested in the original paper on more recent data and also suggest that quality of environmental disclosure rather than mere quantity has a stronger effect on the creation of environmental reputation amongst executive and investor stakeholder groups. Research and development expenditure, and under certain circumstances, diversification, also add to reputation

Research and development expenditure in the business sector as indicator of knowledge economy: the Portuguese experience

The objective of the paper is to help to understand recent changes in the structure of R&D activities, by analyzing data on the expenditure of the business sector in research and development (R&D). The results are framed in an international context, through comparison with indicators from the most developed countries, divided by technological intensity and economic activity. The study reveals that the indicators of Portuguese R&D expenditure in the business sector are closely linked both to fiscal policy and to high foreign direct investment in knowledge-intensive industries. It also links these indicators to phenomena such as the abundance of skilled labor in pharmaceutical industries and the government intervention in some sectors of the economy (namely health and rail transportation)