Peter Egger, Nicole Loumeau, 16 January 2019

Innovative activity is unevenly distributed geographically, with regional characteristics such as global market accessibility or an innovation-promoting policy environment affecting the spatial distribution. Using global data on regional characteristics, regional patenting output, and innovation-promoting policy environments, this column examines the origins of innovation clusters, and particularly the role of R&D tax policy instruments, in attracting innovative firms. It estimates that innovation-promoting R&D tax policy instruments contribute to about one-tenth of the long-term economic growth around the globe.

Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, Daniel Yi Xu, 28 August 2018

Tax incentives to encourage firms to invest in R&D may also encourage firms to fraudulently relabel other expenses as R&D. The column finds that 30% of the increase in reported R&D in response to a Chinese incentive programme was due to relabelling. The size and type of tax break has a large effect on both the level of participation and the incentive to relabel.

Ryoko Ueda, Keiichiro Kobayashi, 18 November 2017

Strategic shareholding – companies holding minority shares in other companies for the sake of business relations – can be used for anticompetition purposes or to reduce pressure from shareholders. This column explores strategic shareholding in Japan. Roughly one third of shareholders are found to be strategic, with three quarters of these being business corporations. However, in Japanese corporate culture it is not uncommon for such shareholding to occur as part of technical or business partnerships without affecting managerial independence.

Murray Leibbrandt, 29 March 2017

Are tax incentives effective in increasing youth employment? In this video, Murray Leibbrandt discusses how this policy works in South Africa. This video was recorded at the UNU-WIDER Conference in Pretoria in December 2016.

Elīna Gaillard, Bas Straathof, 20 January 2015

Tax incentives have become a common policy tool for encouraging firms to spend more on research and development – and the recession has further raised interest in the effectiveness of this policy. This column highlights a new review of the empirical evidence, which suggests that fiscal incentives for R&D only modestly stimulate R&D, while their impact on innovation and economic growth is uncertain.

Laurent Gobillon, Thierry Magnac, Harris Selod, 24 January 2011

The employment effects of enterprise zones are widely studied but remain uncertain. This column examines the impact of recent tax incentives designed to attract businesses to poor residential areas around Paris. It finds that while unemployment decreases, the costs of the programme leave its efficacy open to interpretation.

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