IPRIA Working Paper Series
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Intellectual Property Research Institute of Australia Working Paper No. 05/2009 Tax Policy and R&D Investment by Australian Firms by Russell Thomson Date: April 2009 Abstract: This paper examines the determinants of investment in R&D by Australian firms, with a focus on the role of tax policy. The analysis considers an unbalanced panel of financial data of about 500 large Australian firms between 1990 and 2005. The principal result is that no evidence can be found that the user cost of R&D is an important determinant of firm R&D investment decisions. A corollary is that there is no evidence that tax incentives are an effective policy tool. Growth in sales is found to be the primary determinant of R&D investment, which is interpreted as evidence of the central role of demand conditions. Downloads: PDF [312K] |
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