Increasing Competitiveness of SMEs: R&D Tax Incentives

Increasing Competitiveness of SMEs: R&D Tax Incentives

conference paper

Czech

The objective of this paper is evaluation of effectiveness of R&D tax incentives in small and medium-sized enterprises within the countries of Visegrad Four. The cooperation among states was important for their transition from totalitarian regime toward free, pluralistic and democratic society. Hungary, the Czech Republic, Slovakia and Poland entered together to European Union in May 2004. Small and medium- sized enterprises are the driving force in all economies according to available political and economic sources. The pressure on small and medium-sized entrepreneurship is high. All at once, they are required to be global, to employ local people and to contribute to competitiveness of region. Simultaneously, they have to maintain their competitiveness. Both the strategy Europe 2020 and the Strategy of international competitiveness of the Czech Republic for period 2012 till 2020 greatly emphasize competitiveness increase by innovations, by implementation of modern technologies and especially by investments to R&D. The effectiveness of R&D expenditures of small and medium-sized enterprises is a little discussed topic in the scientific literature. The published contributions describe assessment of R&D tax incentives systems in various world economies. Papers of several authors measure benefits of establishing the R&D tax incentives systems by small and medium-sized enterprises. Elschner et al. (2009) simulated the model of European Tax Analyzer. Tassey (2007) states that "The impact of an R&D tax incentive is affected by its scope of coverage, the ability of industry to take advantage of it over the entire R&D cycle, the magnitude of incentive to other nations tax policies, and its ease of implementation." Baghana and Mohnen (2009) evaluated the effectiveness of R&D tax incentives in Québec. They argue that "The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with slightly higher elasticities for small firms than for large firms". McKenzie (2008) uses the other method "The Hall-Jorgenson-King-Fullerton (HJKF) approach to measuring the user cost of capital, and the related notion of the effective marginal tax rate on capital, it is typically applied to intangible R&D capital".

The objective of this paper is evaluation of effectiveness of R&D tax incentives in small and medium-sized enterprises within the countries of Visegrad Four. The cooperation among states was important for their transition from totalitarian regime toward free, pluralistic and democratic society. Hungary, the Czech Republic, Slovakia and Poland entered together to European Union in May 2004. Small and medium- sized enterprises are the driving force in all economies according to available political and economic sources. The pressure on small and medium-sized entrepreneurship is high. All at once, they are required to be global, to employ local people and to contribute to competitiveness of region. Simultaneously, they have to maintain their competitiveness. Both the strategy Europe 2020 and the Strategy of international competitiveness of the Czech Republic for period 2012 till 2020 greatly emphasize competitiveness increase by innovations, by implementation of modern technologies and especially by investments to R&D. The effectiveness of R&D expenditures of small and medium-sized enterprises is a little discussed topic in the scientific literature. The published contributions describe assessment of R&D tax incentives systems in various world economies. Papers of several authors measure benefits of establishing the R&D tax incentives systems by small and medium-sized enterprises. Elschner et al. (2009) simulated the model of European Tax Analyzer. Tassey (2007) states that "The impact of an R&D tax incentive is affected by its scope of coverage, the ability of industry to take advantage of it over the entire R&D cycle, the magnitude of incentive to other nations tax policies, and its ease of implementation." Baghana and Mohnen (2009) evaluated the effectiveness of R&D tax incentives in Québec. They argue that "The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with slightly higher elasticities for small firms than for large firms". McKenzie (2008) uses the other method "The Hall-Jorgenson-King-Fullerton (HJKF) approach to measuring the user cost of capital, and the related notion of the effective marginal tax rate on capital, it is typically applied to intangible R&D capital".

R&D tax incentives, innovation policy, small and medium-sized enterprises, countries of Visegrad Four, competitiveness

R&D tax incentives, innovation policy, small and medium-sized enterprises, countries of Visegrad Four, competitiveness

BOČKOVÁ, N.

2012

22. 9. 2012

FBM BUT Brno

Brno

978-80-214-4581-9

Trends in Economics and Management for the 21 Century

194

199

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