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The race for R&D subsidies: evaluating the effectiveness of tax credits in Italy
Author/s: Claudia Cantabene, Leopoldo Nascia 
Year:  2014 Issue: Language: Italian 
Pages:  26 Pg. 133-158 FullText PDF:  122 KB
DOI:  10.3280/POLI2014-003006
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In Italy, between 2007 and 2009, the public support to innovation was focused on tax credit for business R&D. However, one year after its introduction, the Italian government limited the diffusion of such benefit by setting an upper threshold to potentially forgone tax revenue and introducing an electronic selection procedure which made the access to tax credit by firms a random process. This gave us the chance of evaluating the economic impact of this subsidy by designing a quasi-experiment. Exploiting original evidence from administrative and statistical sources, it is possible to argue that the Italian tax credit 2007-2009 had been successful in stimulating private R&D expenditure and that a R&D cost elasticity of around 1.6 could be estimated.
Keywords: R&D investment, tax credit, additionality
Jel Code: C14, H32, O32

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Claudia Cantabene, Leopoldo Nascia, in "ECONOMIA E POLITICA INDUSTRIALE " 3/2014, pp. 133-158, DOI:10.3280/POLI2014-003006


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