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Empirica

, Volume 30, Issue 4, pp 357–377 | Cite as

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

  • Maria Laura Parisi
  • Alessandro Sembenelli
Article

Abstract

In this paper empirical evidence is presented on theelasticity of private R & D spending on its price. Acensored panel-data regression model with random effectsis applied to a balanced panel of 726 Italian firms overthe 1992–1997 period. Implied estimates point out thatItalian firms' response to policy measures (including taxcredits), aimed at reducing the user cost of R & D capital,is likely to be substantial (1.50–1.77). Furthermore, wealso find that the elasticity of R & D spending is higherin recession (2.01) than in expansion (0.87).

R & D user cost panel data tobit model 

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Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • Maria Laura Parisi
    • 1
  • Alessandro Sembenelli
    • 2
  1. 1.University of PadovaItaly
  2. 2.University of TorinoItaly

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