Public R&D policies and cost behavior of the US manufacturing industries
AuthorMamuneas, Theofanis P.
Nadiri, M. Ishaq
SourceJournal of Public Economics
Google Scholar check
MetadataShow full item record
This paper estimates and evaluates the contribution of R&D tax incentives and publicly financed R&D investment policies in promoting the growth of output and privately funded R&D investment in US manufacturing industries. Publicly financed R&D induces cost savings but crowds out privately financed R&D investment, while the incremental R&D tax credit and immediate deductibility provision of R&D expenditures have a significant impact on privately financed R&D investment. The optimal mix of both instruments is an important element for sustaining a balanced growth in output and productivity in the manufacturing sector.