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

Empirica, Kluwer Academic Publisher, Vol. 30, 2003, pp.357-377

Posted: 28 Jul 2012

See all articles by Maria Laura Parisi

Maria Laura Parisi

University of Brescia, Department of Economics and Management

Alessandro Sembenelli

University of Turin - Department of Economics and Financial Sciences G. Prato

Date Written: 2003

Abstract

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 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 also 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

JEL Classification: C33, C34, H25, O31

Suggested Citation

Parisi, Maria Laura and Sembenelli, Alessandro, Is Private R&D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy (2003). Empirica, Kluwer Academic Publisher, Vol. 30, 2003, pp.357-377, Available at SSRN: https://ssrn.com/abstract=2118762

Maria Laura Parisi (Contact Author)

University of Brescia, Department of Economics and Management ( email )

via San Faustino 74/b
Brescia, 25122
Italy
+39 0302988826 (Phone)
+39 0302988837 (Fax)

Alessandro Sembenelli

University of Turin - Department of Economics and Financial Sciences G. Prato ( email )

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy
+39 011 670 6059 (Phone)
+39 011 670 6062 (Fax)

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