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Is Private R&D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy
Empirica (2003)
  • Maria Laura Parisi
  • Alessandro Sembenelli
Abstract

In this paper empirical evidence is presented on th elasticity of private R&D spending on its price. A censored panel-data regression model with random effects is applied to a balanced panel of 726 Italian firms over the 1992-1997 period. Implied estimates point out that Italian firms' response to policy measures (including tax credits), aimed at reducing the user cost of R&D capital, is likely to be substantial (1.50-1.77). Furthermore, we find that the elasticity of R&D spending is higher in recession (2.01) than in expansion (0.87).

Keywords
  • R&D user cost,
  • panel data,
  • tobit model
Disciplines
Publication Date
December, 2003
Citation Information
Maria Laura Parisi and Alessandro Sembenelli. "Is Private R&D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy" Empirica Vol. 30 Iss. 4 (2003)
Available at: http://works.bepress.com/marialaura_parisi/4/