Takalo, Tuomas; Tanayama, Tanja; Toivanen, Otto - 2022
analysis. The intensive, not the extensive R&D margin is important. Financial market imperfections are small. Tax credits and … subsidies do not reach first best R&D but increase R&D 29-47% compared to laissez-faire. Welfare effects are small: Tax credits … increase welfare 1%; subsidies reduce welfare once application costs are taken into accout. In terms of fiscal cost, tax …