Public R&D Policies and Cost Behavior of the US Manufacturing Industries

Theofanis P. Mamuneas, M. Ishaq Nadiri

NBER Working Paper No. 5059 (Also Reprint No. r2135)
Issued in June 1997
NBER Program(s):   EFG   PR

This paper estimates and evaluates the contributions of R&D tax incentives and publicly financed R&D investment policies in promoting growth of output and privately funded R&D investment in US manufacturing industries. Publicly financed R&D induces cost savings but crowds out privately-financed R&D investment while the incremental R&D tax credit and the immediate deductibility provision of R&D expenditures have a significant impact on privately financed R&D investment. The optimal mix of both instruments is an important element for sustaining a balanced growth in output and productivity in the manufacturing sector.

(419 K)

Published: Journal of Public Economics, vol. 63, no.1 (Dec 1996): 57-81.

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