tailieunhanh - Master Thesis in Economics “An analysis of the effectiveness of government R&D policies on business R&D expenditure”

It is a known fact that generally speaking industrial companies are not well- equipped in the credit risk measurement area can also be because their potential losses are easier mitigated due to the fact that their credit risks are relatively low. “Trade receivables are generally high-quality assets because companies are very reluctant to jeopardize their relationships with the partners” 2 . In addition, trade receivables of industrial companies are relatively short-term in nature and thus the collection procedure is relatively easier. . | The Royal Institute of Technology Master s program in Economics of Innovation and Growth Professor Stefan Folster Master Thesis in Economics An analysis of the effectiveness of government R D policies on business R D expenditure Written by Kaifeng Li kaifeng_baoding@ June 2010 ABSTRACT This thesis investigates the effectiveness of government R D policies in 13 OECD countries from 1985 to 2007. R D plays an important role in the world economy and business-funded R D accounts for the majority in total R D spending. Policy-makers design various R D policies to stimulate business R D expenditure. Since the existence of R D policies researchers highly contributed their enthusiasm on the analysis of the efficiency of those R D policies but the validity of government intervention still received considerable controversy. Thereby the purpose of this thesis is tried to follow the historical arguments and investigates the effectiveness of government R D policies on business-funded R D. Three questions are mainly addressed Does the leverage effect of public funding on business R D really exist How those different policy instruments do influence firms R D behavior How do those policy instruments interact with each other The thesis searched the answers for the three questions and concluded that the optimal policy tool for government to stimulate private R D is tax incentives and government cannot affect much to firms R D investment decisions. Key words Business-funded R D government funding of R D performed in business tax incentive government research university research crowding-out effect crowding-in effect. II ACKNOWLEDGEMENTS I would like to express my gratitude to my supervisor Professor Stefan Folster for the valuable guidance the precious help and the constructive advices he provided to me during the entire process. Special thanks go to the Professor Hans Loof for the data analysis guidance without his generous support and unlimited patience it is surely that