IDEAS home Printed from https://ideas.repec.org/a/col/000443/019741.html
   My bibliography  Save this article

Analysis of the Brazilian tax incentives to innovation and patent data: a Principal-Agent model approach

Author

Listed:
  • Felippe Clemente

Abstract

We propose to evaluate Lei do Bem (law 11.196/05) for Brazilian regions (North, Northeast, Center-West, Southeast and South). This is the first study that analyzes Lei do Bem using extensive game simulations for the different regions of the country. Based on data from 2006 to 2015, we find moral hazard between government and innovative Brazilian companies, as there was no express incentive in the Lei do Bem to stimulate the industrial sector to innovate and register the innovation as a patent. Thus, policies that review the tax incentives structure contained in the Lei do Bem as well as encourage industries and companies to file patents in public patent databases may have positive effects on the Brazilian innovation system.

Suggested Citation

  • Felippe Clemente, 2021. "Analysis of the Brazilian tax incentives to innovation and patent data: a Principal-Agent model approach," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 13(2), pages 403-437, August.
  • Handle: RePEc:col:000443:019741
    as

    Download full text from publisher

    File URL: https://revfinypolecon.ucatolica.edu.co/article/view/3424
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Blind, Knut & Pohlisch, Jakob & Zi, Aikaterini, 2018. "Publishing, patenting, and standardization: Motives and barriers of scientists," Research Policy, Elsevier, vol. 47(7), pages 1185-1197.
    2. Alam, Pervaiz & Walton, Karen Schuele, 1995. "Information Asymmetry and Valuation Effects of Debt Financing," The Financial Review, Eastern Finance Association, vol. 30(2), pages 289-311, May.
    3. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    4. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    5. James J. Anton & Dennis A. Yao, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 513-531.
    6. Sudipto Bhattacharya & Jay R. Ritter, 1983. "Innovation and Communication: Signalling with Partial Disclosure," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(2), pages 331-346.
    7. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    8. repec:fth:harver:1473 is not listed on IDEAS
    9. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107, Elsevier.
    10. Ana Paula Avellar, 2007. "Impacto Das Políticas De Fomento À Inovação Sobre O Gasto Em Atividades Inovativas E Em Atividades De P&D Das Empresas," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 062, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    11. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    12. Eduardo da Motta e Albuquerque, 1996. "Sistema nacional de inovação no Brasil: uma análise introdutória a partir de dados disponívels sobre a ciência e tecnologia," Brazilian Journal of Political Economy, Center of Political Economy, vol. 16(3).
    13. Zantout, Zaher Z, 1997. "A Test of the Debt-Monitoring Hypothesis: The Case of Corporate R&D Expenditures," The Financial Review, Eastern Finance Association, vol. 32(1), pages 21-48, February.
    14. Francis, Jennifer & Smith, Abbie, 1995. "Agency costs and innovation some empirical evidence," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 383-409, April.
    15. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    16. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    17. William Pugh & John Jahera & Sharon Oswald, 1999. "ESOPs, takeover protection, and corporate decision-making," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(2), pages 170-183, June.
    18. Clemente, Felippe & da Silva Júnior, Aziz Galvão, 2013. "Contracts Between Small Scale Soybean Farmers and the Biodiesel Industry in Brazil: An Application of Principal-Agent Model," 2013 International European Forum, February 18-22, 2013, Innsbruck-Igls, Austria 164767, International European Forum on System Dynamics and Innovation in Food Networks.
    19. Sumit K. Majumdar & Anuradha Nagarajan, 1997. "The Impact of Changing Stock Ownership Patterns in the United States : Theoretical Implications and Some Evidence," Revue d'Économie Industrielle, Programme National Persée, vol. 82(1), pages 39-54.
    20. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    2. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    3. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(1), pages 153-182, February.
    4. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, September.
    5. Blanco, Iván & Wehrheim, David, 2017. "The bright side of financial derivatives: Options trading and firm innovation," Journal of Financial Economics, Elsevier, vol. 125(1), pages 99-119.
    6. Aamir Rafique Hashmi & Johannes Van Biesebroeck, 2016. "The Relationship between Market Structure and Innovation in Industry Equilibrium: A Case Study of the Global Automobile Industry," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 192-208, March.
    7. Manuel Acosta Sero & Daniel Coronado Guerrero, 1998. "The influence of regional location on the innovation activity of Spanish firms: A logit analysis," ERSA conference papers ersa98p63, European Regional Science Association.
    8. Hanna Hottenrott & Bronwyn H. Hall & Dirk Czarnitzki, 2016. "Patents as quality signals? The implications for financing constraints on R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 197-217, April.
    9. Sharon Belenzon & Tomer Berkovitz, 2010. "Innovation in Business Groups," Management Science, INFORMS, vol. 56(3), pages 519-535, March.
    10. Filippo Belloc & Eleonora Laurenza & M. Alessandra Rossi, 2016. "Corporate governance effects on innovation when both agency costs and asset specificity matter," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(6), pages 977-999.
    11. Mahmut Yaşar & Catherine Paul, 2012. "Firm performance and knowledge spillovers from academic, industrial and foreign linkages: the case of China," Journal of Productivity Analysis, Springer, vol. 38(3), pages 237-253, December.
    12. Mahmood, Ishtiaq P. & Lee, Chang-Yang, 2004. "Business groups: entry barrier-innovation debate revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 54(4), pages 513-531, August.
    13. Johannes Van Biesebroeck & Aamir Hashmi, 2007. "Market Structure and Innovation: A Dynamic Analysis of the Global Automobile Industry," 2007 Meeting Papers 362, Society for Economic Dynamics.
    14. Hanna Hottenrott & Bettina Peters, 2012. "Innovative Capability and Financing Constraints for Innovation: More Money, More Innovation?," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1126-1142, November.
    15. Mihaela Diaconu, 2016. "Determinants of Financing Decisions in Innovative Firms: A Review on Theoretical Backgrounds and Empirical Evidence," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 198-203, February.
    16. Mario Tirelli & Luca Spinesi, 2021. "R&D financing and growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(1), pages 24-47, January.
    17. Xulia Gonzalez & Consuelo Pazo, 2004. "Firms' R&D dilemma: to undertake or not to undertake R&D," Applied Economics Letters, Taylor & Francis Journals, vol. 11(1), pages 55-59.
    18. Heshmati, Almas & Kim, Yee-Kyoung & Kim, Hyesung, 2006. "The Effects of Innovation on Performance of Korean Firms," Ratio Working Papers 90, The Ratio Institute.
    19. Frédérique Savignac, 2006. "The impact of financial constraints on innovation: evidence from french manufacturing firms," Cahiers de la Maison des Sciences Economiques v06042, Université Panthéon-Sorbonne (Paris 1).
    20. Jaimin Goh & Jaehong Lee & Wonchang Hur & Yunchang Ju, 2019. "Do Analysts Fully Reflect Information in Patents about Future Earnings?," Sustainability, MDPI, vol. 11(10), pages 1-17, May.

    More about this item

    Keywords

    Lei do Bem; innovation; patent data; Principal-Agent model;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000443:019741. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Universidad Católica de Colombia (email available below). General contact details of provider: https://edirc.repec.org/data/feuccco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.