Labor tax and relative cost of R&D

• Autorzy: Monika Lewandowska-Kalina
• Języki publikacji: EN

Abstrakty

EN

This paper examines the impact of taxation of labor on investment in Research and Development. Given the central role of R&D as an engine of business expansion and economy growth, issue of estimating the barriers to R&D is a vital one, both from theoretical and practical point of view. We analyse the impact of labor taxation on decision to invest in R&D. We show that labor taxation changes relative costs of R&D investment versus fixed capital formation. It leads to allocation of investment more towards physical capital formation than R&D investment. In the empirical part of the paper, using panel and cross-section of countries, we shed light on the impact of taxation of labor on R&D. Our estimates indicate that labor tax has a significant adverse impact on R&D investment, and its negative impact is larger for R&D than for physical capital. (original abstract)

Słowa kluczowe

PL

Opodatkowanie; Praca; Koszty alternatywne; Inwestycje kapitałowe; Placówki badawczo-rozwojowe; Opodatkowanie pracy; Koszty względne

EN

Taxation; Labour; Opportunity cost; Capital investments; R&D facility research; Labour taxation; Relative cost

• Czasopismo: Department of Applied Econometrics Working Papers
• Rocznik: 2014
• Numer: nr 1
• Strony: 19

Twórcy

autor

Monika Lewandowska-Kalina

• Warsaw School of Economics, Poland

Bibliografia

• Barro, Robert J., 1991. Economic Growth in a Cross Section of Countries, "Quarterly Journal of Economics", 106(2): 40743.
• Baumol, William J., Robert E. Litan, Carl J. Schramm, 2007. Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity, New Haven, CT: Yale University Press.
• Cullen, J.B., Gordon R.H. .2007. Taxes and entrepreneurial risk-taking: Theory and evidence for the U.S., "Journal of Public Economics", 91, 1479-1505.
• DeLong, J. Bradford, Lawrence H. Summers, 1991. Equipment Investment and Economic Growth, "Quarterly Journal of Economics", 106(2): 445-502.
• Driscoll, J., A. C. Kraay. 1998. Consistent covariance matrix estimation with spatially dependent data. "Review of Economics and Statistics" 80:549(560).
• Elschner, C., L. Lammersen, M. Overesch, R. Schwager, 2006. The Effective Tax Burden of Companies and of Highly Skilled Manpower: Tax Policy Strategies in a Globalised Economy, "Fiscal Studies", vol. 27, no. 4, pp. 513-524.
• Golsbee. A .1998. Does Government R&D Policy mainly benefits scientists and engineers? A.E.A. Meetings, Chicago, Illinois January, 1998.
• Graham, John R., 1996. Debt and the Marginal Tax Rate, "Journal of Financial Economics", 41(1)41-73.
• Griliches, Z. 1997. R&D and Productivity: The Econometric Evidence, University of Chicago Press.
• Hajkova, D., G. Nicoletti, L. Vartia, K.Y. Yoo, 2006. Taxation and Business Environment as Drivers of Foreign Direct Investment in OECD Countries, "OECD Economic Studies", No. 43/2.
• Hall, B.H. 1996. The Private and Social Returns to Research and Development, s.140-183, in: Technology, R&D, and the Economy, Bruce L.R. Smith, Claude E. Barfield, eds., Brookings Institutions Press, Washington, D.C.
• Hall, Robert E., Dale W. Jorgenson. 1967. Tax Policy and Investment Behavior, "American Economic Review", 57(3): 391414.
• Helpman, Elhanan. 1993. Innovation, Imitation, and Intellectual Property Rights, "Econometrica", 61, no. 6: 1247-80.
• Jones, C., J. Williams.1998. Measuring the Social Rate of Return to R&D, "Quarterly Journal of Economics", 113(4), 119-35.
• Jorgenson, Dale W., 1963. Capital Theory and Investment Behavior, "American Economic Review", 53(2): 24759.
• Lee Y., Gordon R.H. 2005. Tax structure and economic growth, "Journal of Public Economics", 89 (2005) 1027-1043.
• McDaniel, Cara.2007. Average tax rates on consumption, investment, labor and capital in the OECD countries 1950 - 2007. Arizona State University working paper.
• Miller, Merton H. 1977. Debt and Taxes. Journal of Finance, 32(2): 261-75.
• Murphy, Kevin, Andrei Shleifer, and Robert Vishny. 1992. The Allocation of Talent: Implications for Growth, Quarterly Journal of Economics, 106(2), 503-530.
• National Science Foundation. 1995. Research and Development in Industry, Government Printing Office; Washington D.C.
• OECD, Taxing Wages 2002-2008, Paris: Organisation for Economic Cooperation and Development.
• OECD. 2010. Tax Policy Reform and Economic Growth, Paris, Organisation for Economic Cooperation and Development.
• Ryoo, J., S. Rosen.1992.The Market for Engineers, Stigler Center paper 83.
• Shleifer A., Djankov S., Ganser T., McLiesh C., Ramalho R. 2010. The Effect of Corporate Taxes on Investment and Entrepreneurship, "American Economic Journal: Macroeconomics", 2, 3, 31-64, July 2010.
• Wolf M., 2004. Why Globalization Works? Penguin Press, London.