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R&D grant and tax credit support for foreign-owned subsidiaries: Does it pay off?
Lenihan, Helena
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Mulligan, Kevin
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Doran, Justin
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Rammer, Christian
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Ipinnaiye, Olubunmi
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URN:
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urn:nbn:de:bsz:180-madoc-623112
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Document Type:
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Working paper
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Year of publication:
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2022
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The title of a journal, publication series:
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ZEW Discussion Papers
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Volume:
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22-003
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Place of publication:
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Mannheim
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Publication language:
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English
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Institution:
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Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
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MADOC publication series:
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Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
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Subject:
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330 Economics
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Classification:
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JEL:
D22 , O25 , F23 , F21, O38 , D04 , H25 , O31,
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Keywords (English):
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public funding for R&D , firm performance , firm ownership , foreign-owned subsidiaries, multinational enterprise , R&D tax credit , R&D grant , policy evaluation
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Abstract:
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Foreign-owned subsidiaries make significant contributions to national Research and Development (R&D) in many host countries. Policymakers often support subsidiaries through R&D grants and R&D tax credits. A key objective of this funding is to leverage R&D-driven firm performance benefits for the host economy. However, the subsidiary's parent firm may decide not to exploit the results from publicly-funded R&D projects in the host country. Therefore, supporting subsidiaries’ R&D presents a risk that significant amounts of public funding may translate into little, or no payoffs for the host economy. Our study provides the first evaluation of 1) whether public R&D funding stimulates additional R&D investment in subsidiaries, 2) whether policy-induced R&D drives subsidiary performance, and 3) the differential effects of R&D grants and R&D tax credits. Drawing on a unique panel dataset for Ireland (2007-2016), we find that both R&D supports drive subsidiary R&D, resulting in substantial host country firm performance benefits
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 | Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt. |
 Search Authors in
BASE:
Lenihan, Helena
;
Mulligan, Kevin
;
Doran, Justin
;
Rammer, Christian
;
Ipinnaiye, Olubunmi
Google Scholar:
Lenihan, Helena
;
Mulligan, Kevin
;
Doran, Justin
;
Rammer, Christian
;
Ipinnaiye, Olubunmi
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