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| Tekijä: | Watkins, T.A. Paff, L.A. |
| Otsikko: | Absorptive capacity and R&D tax policy: Are in-house and external contract R&D substitutes or complements? |
| Lehti: | Small business economics
2009 : AUG, VOL. 33:2, p. 207-227 |
| Asiasana: | technology policy R&D tax credits capacity pharmaceutical industry software industries companies USA |
| Kieli: | eng |
| Tiivistelmä: | Research and development (R&D) is funded by firms to generate commercializable innovations and to increase their ability to understand and absorb knowledge from elsewhere. It is questioned: Is internal R&D a complement or substitute for external R&D? A model and novel technique is developed to empirically estimate R&D substitution elasticities. The focus is on bio-pharmaceutical and software industries in California and Massachusetts of the United States (U.S.), where tax credit rates changed differently over time for the two types of R&D. The effective tax prices for the two R&D types differ from type to type, firm to firm etc. which allows examining of changes in the composition of firms' R&D budgets btw. in-house R&D and external basic research with the relative tax prices of each category of research changing. There is found evidence of a substitute relationship both for a sample comprising exclusively small firms and for a more general distribution of firm sizes. |
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