Is Private R&D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy

Maria Laura Parisi, Alessandro Sembenelli
2001 Social Science Research Network  
In this paper empirical evidence is presented on the elasticity of private R&D spending on its price. A censored panel-data regression model with random e¤ects is applied to a balanced panel of 726 Italian ...rms over the 1992-97 period. Implied estimates point out that Italian ...rms' 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 also ...nd that the elasticity of R&D spending is
more » ... r in recession (2.01) than in expansion (0.87). ¤ We would like to thank S. Chiri, M. Da Rin, A. Franzosi, M. Galeotti, L. Gandullia, P. Gottschalk, M. Messori, P. Rota, F. Schiantarelli and M. Vivarelli for helpful comments and suggestions on a previous draft. For correspondence please use and
doi:10.2139/ssrn.265394 fatcat:24fowg3ztfe2xo6nolxktywo4m