Measuring firm-level productivity convergence in the UK: the role of taxation and R&D investment
Working paper
Bournakis, I., Sushanta, M., Kernohan, D. and Tsouknidis, D. 2013. Measuring firm-level productivity convergence in the UK: the role of taxation and R&D investment. London Queen Mary University of London.
Type | Working paper |
---|---|
Title | Measuring firm-level productivity convergence in the UK: the role of taxation and R&D investment |
Authors | Bournakis, I., Sushanta, M., Kernohan, D. and Tsouknidis, D. |
Abstract | This paper examines the direct effects of corporate tax on firm productivity along with the interaction effects of tax policy and R&D activity on productivity at firm level for over 13,062 firms during 2004-2011. Our main findings are first, that there is evidence for productivity convergence and we find that there is a positive robust relationship between R&D and firm productivity, whereas tax policy has a negative distortionary effect on TFP. Second, firms with greater export orientation do not seem to achieve much improvement in productivity, whereas the favourable productivity effect in the case of R&D-based firms suggests that if there are tax incentives in place for R&D type activity, it can promote innovation and drive productivity convergence (lagging firms closing the technology gap with those at the frontier), particularly so when there is a continued decline in overall economic activity. The results also show a significant non-linear effect of tax rate on firm-level productivity, identifying an inverse U-shaped relationship. |
Publisher | Queen Mary University of London |
Place of publication | London |
Publication process dates | |
Deposited | 27 Dec 2013 |
Output status | Published |
Additional information | CGR Working Paper 45 |
Web address (URL) | http://webspace.qmul.ac.uk/pmartins/CGRWP45.pdf |
Language | English |
Institution name | Queen Mary University of London |
Department name | Centre for Globalisation Research, School of Business and Management |
File |
https://repository.mdx.ac.uk/item/84960
Download files
41
total views9
total downloads0
views this month0
downloads this month