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The Impact of Private Research and Development Expenditures and Tax Incentives on Sustainable Corporate Growth in Selected OECD Countries

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  • Dejan Ravšelj

    (Faculty of Administration, University of Ljubljana, 1000 Ljubljana, Slovenia)

  • Aleksander Aristovnik

    (Faculty of Administration, University of Ljubljana, 1000 Ljubljana, Slovenia)

Abstract

Investment in research and development (R&D) plays a vital role in sustainable economic growth in many countries around the world. In addition, also companies are aware of that R&D investment is becoming more and more important since it can generate future benefits, which may ultimately result in the sustainable corporate growth. The aim of this paper is to evaluate the impact of private R&D expenditures and R&D tax incentives on sustainable corporate growth. Using multiple regression analysis, a panel dataset of 1372 companies investing the largest amounts in R&D activity is analysed. The results of this paper reveal that private R&D expenditures as well as R&D tax incentives (in interaction with private R&D expenditures) have a positive impact on sustainable corporate growth at the firm level in selected Organisation for Economic Co-operation and Development (OECD) countries. The comparison between different subgroups of companies reveals that private R&D expenditures represent one of the main driver of sustainable corporate growth especially in high-tech companies, while R&D tax incentives (in interaction with private R&D expenditures) are key determinant of sustainable corporate growth in both subgroups of companies. The results may help governments in the formulation of relevant R&D tax incentive policy in the future.

Suggested Citation

  • Dejan Ravšelj & Aleksander Aristovnik, 2018. "The Impact of Private Research and Development Expenditures and Tax Incentives on Sustainable Corporate Growth in Selected OECD Countries," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2304-:d:156069
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    2. Sara Picas & Pedro Reis & António Pinto & José Luís Abrantes, 2021. "Does Tax, Financial, and Government Incentives Impact Long-Term Portuguese SMEs’ Sustainable Company Performance?," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    3. Namryoung Lee & Jaehong Lee, 2019. "R & D Intensity and Dividend Policy: Evidence from South Korea’s Biotech Firms," Sustainability, MDPI, vol. 11(18), pages 1-21, September.
    4. Lingyan Li & Lujiao Feng & Xiaotong Guo & Haiyan Xie & Wei Shi, 2020. "Complex Network Analysis of Transmission Mechanism for Sustainable Incentive Policies," Sustainability, MDPI, vol. 12(2), pages 1-25, January.
    5. Dejan Ravšelj & Aleksander Aristovnik, 2020. "The Impact of Public R&D Subsidies and Tax Incentives on Business R&D Expenditures," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 160-179.
    6. Xueying Yang & Zhongqi Yang & Lili Quan & Bin Xue, 2024. "Pursuing Urban Sustainability in Dynamic Balance Based on the DPSIR Framework: Evidence from Six Chinese Cities," Land, MDPI, vol. 13(8), pages 1-20, August.
    7. Dejan Ravšelj & Aleksander Aristovnik, 2020. "The Impact of R&D Expenditures on Corporate Performance: Evidence from Slovenian and World R&D Companies," Sustainability, MDPI, vol. 12(5), pages 1-20, March.
    8. Fazal Ur Rehman & Basheer M. Al-Ghazali & Adel Ghaleb Haddad & Ehab Abdullatif Qahwash & M. Sadiq Sohail, 2023. "Exploring the Reverse Relationship between Circular Economy Innovation and Digital Sustainability—The Dual Mediation of Government Incentives," Sustainability, MDPI, vol. 15(6), pages 1-21, March.
    9. Gustavo Pineiro-Villaverde & María Teresa García-Álvarez, 2020. "Sustainable Consumption and Production: Exploring the Links with Resources Productivity in the EU-28," Sustainability, MDPI, vol. 12(21), pages 1-13, October.
    10. Květa Olšanová & Eva Křenková & Pavel Hnát & Ondřej Vilikus, 2021. "State-Business Relations from the Perspective of the Companies' Preparedness for the Changes Related to the Implementation of the Industry 4.0 Elements: A Case of the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2021(5), pages 53-79.

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