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Title: | The role of peer effects in firms' usage of R&D tax exemptions | Authors: | KELCHTERMANS, Stijn Neicu, Daniel Teirlinck, Peter |
Issue Date: | 2020 | Publisher: | Elsevier | Source: | Journal of business research, 108 , p. 74 -91 | Abstract: | 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. JEL classifications: D83 D85 L14 O38 A B S T R A C T Survey evidence suggests that firms are insufficiently aware of newly introduced R&D support measures due to the complexity of the public support landscape. As a result, adoption is slow and incomplete, which implies that eligible firms leave money on the table. We hypothesize that a key coping mechanism involves firms relying on their peers' behaviour to inform their own adoption decision. We test this hypothesis by analysing firms' first use of a newly-introduced R&D tax exemption scheme in Belgium. We identify endogenous peer effects in industry-and location-based peer groups by exploiting the intransitivity in firms' networks as well as variation in peer group size. The results show that firms' decisions to use R&D tax exemptions are influenced by the choices of their peers, primarily in the time window immediately following their introduction. The findings suggest that the efficacy of R&D policy can be improved by accounting for the structure of firm networks in the communication of new support initiatives. |
Keywords: | Peer effects;Information diffusion;R&D tax exemptions;Innovation;policy | Document URI: | http://hdl.handle.net/1942/30091 | ISSN: | 0148-2963 | e-ISSN: | 1873-7978 | DOI: | 10.1016/j.jbusres.2019.09.059 | ISI #: | WOS:000518709500008 | Rights: | 2019 Elsevier Inc. All rights reserved | Category: | A1 | Type: | Journal Contribution | Validations: | ecoom 2021 |
Appears in Collections: | Research publications |
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1-s2.0-S0148296319305697-main.pdf Restricted Access | Published version | 2.4 MB | Adobe PDF | View/Open Request a copy |
Kelchtermans_etal_2019_peer effects_preprint.pdf | Peer-reviewed author version | 1.29 MB | Adobe PDF | View/Open |
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