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This paper studies the effect of R&D tax incentives on the research activity of manufacturing firms based in France, Italy, Spain and the UK, over the period 2007–2009. Using a matching procedure, we show that, in all the examined countries but Spain, R&D tax incentives induced a statistically significant increase in the intensity of R&D expenses over sales. However, this effect is driven only by the behaviour of small firms. By assessing the benefit-cost ratio of R&D tax policies, we find evidence of substantial additional effects in Italy and the UK. [ABSTRACT FROM AUTHOR]

Using data for 12 manufacturing industries over the period 1980–2006, we perform for Italy and Spain a dynamic panel estimation of the long-run elasticity of total factor productivity (TFP) with respect to R&D capital. In spite of recording a level of R&D capital lower than Italian industries, the technology-based industries in Spain have experienced a similar or higher long-run impact on TFP. This is mainly attributable to what occurred from the mid-1990s onwards when, thanks to increasing R&D efforts, the Spanish industries have been able to catch up with respect to the Italian ones. These findings suggest that, also in countries classified as technology followers, R&D investment is a crucial condition for boosting manufacturing productivity. [ABSTRACT FROM AUTHOR]

Using data for twelve manufacturing industries of five developed countries over the period 1980-2002, we perform a dynamic panel estimation of the long-run elasticity of TFP with respect to R&D capital. The highest elasticity is found for the US (0.39), followed by Germany (0.29-32); intermediate values are achieved by France (0.19-0.21) and Spain (0.19), while Italy records the lowest R&D impact (0.08-0.12). The latter finding, supported by an in depth analysis based on a longer time-span and more accurate data, can be ascribed to the declining R&D efforts undertaken, during the Nineties, by Italian manufacturing industries. [ABSTRACT FROM AUTHOR]