Impacts of Government Incentives to R&D. Innovation and Productivity: A Microeconometric Analysis of the Québec Case

Rufin Baghana,

The dissertation empirically assesses the effectiveness of direct and indirect measures of government support to R&D and innovation on the private investment in R&D of firms and their resulting economic performances, in particular in terms of innovation output and labour productivity. The main results are as follows: There is a deadweight loss due to the level-based R&D tax credit scheme because it supports R&D that would have been done anyway. The incremental R&D tax credit is much more effective than the level-based tax credit and its effectiveness does not vary much by firm size. When the R&D tax assistance is level-based there is a certain threshold beyond which government funding yields a negative bang for the buck. Firms that use public grants for R&D in conjunction with R&D tax incentives perform better in terms of R&D input additionality and in terms of productivity growth than firms that use only R&D tax incentives. Manufacturing firms in Québec that invest in innovation have a labour productivity that is comparable to that of OECD countries. Subsidized firms closer to the technology frontier spend more on innovation and earn more sales from product innovation than those further away.

About the speaker
Rufin Sosthene Arsene Baghana was born on April 16, 1971 in Brazzaville, Congo. He studied Economics at the Ecole des Science de la Gestion (ESG), Universite du Quebec a Montreal (Canada), where he graduated with a Masterfs degree. He also followed part of his doctoral studies at the ESG. During his academic career, Rufin held teaching positions for two consecutive years (2000]2001). He acted as teaching assistant for an Econometric course for the MBA program at the ESG. In 2001, Rufin joined the Ministere des Finances du Quebec, where he currently works as an advisor in the Financial Organisation and State]Owned Enterprises division.

Venue: Minderbroedersberg 4-6, Maastricht, the Netherlands

Date: 17 May 2013

Time: 16:00 - 17:30  CET