The role of peer effects in firms' usage of R&D tax exemptions

Survey evidence suggests that firms are insufficiently aware of newly introduced R&D support measures due to the complexity of the public supportlandscape. Asaresult,adoptionisslowandincomplete,whichimpliesthateligiblefirmsleavemoneyonthetable.Wehypothesizethatakeycopingmechanisminvolvesfirmsrelyingontheirpeers’behaviourtoinformtheirownadoptiondecision.Wetestthishypothesisbyanalysingfirms'firstuseofanewly-introducedR&DtaxexemptionschemeinBelgium.Weidentifyendogenouspeereffectsinindustry-andlocation-basedpeergroupsbyexploitingtheintransitivityinfirms’networksaswellasvariationinpeergroupsize.Theresultsshowthatfirms’decisionstouseR&Dtaxexemptionsareinfluencedbythechoicesoftheirpeers,primarilyinthetimewindowimmediatelyfollowingtheirintroduction.ThefindingssuggestthattheefficacyofR&Dpolicycanbeimprovedbyaccountingforthestructureoffirmnetworksinthecommunicationofnewsupportinitiatives.

Jaar van publicatie:2020

Trefwoorden:Peer effects, Information diffusion, R&D tax exemptions, Innovation, policy

BOF-keylabel:ja

IOF-keylabel:ja

BOF-publication weight:3

CSS-citation score:1

Authors from:Government, Higher Education, Private

Toegankelijkheid:Open