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).
- R&D user cost,
- panel data,
- tobit model
Available at: http://works.bepress.com/marialaura_parisi/4/