IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v14y2023i2d10.1007_s13132-021-00882-y.html
   My bibliography  Save this article

The Impact of Government Interventions on the Performance of Biotechnology, Information and Communications Technology, and Electrical and Electronics Firms: Evidence from Iran

Author

Listed:
  • Sepehr Ghazinoory

    (Tarbiat Modares University)

  • Zahra Hashemi

    (National Research Institute For Science Policy)

Abstract

Governments can implement monetary and fiscal policies to facilitate the formation and growth of firms, such as tax incentives and direct funding. In developing countries, these incentives are for various purposes like to regulate the allocation of resources, support private sector investments through incentives, palliate inequality between income and wealth, control inflation, and create resources for the public sector. In Iran, the law for supporting knowledge-based firms (KBFs) considers policy incentives (e.g., a 15-year sales tax exemption and low-interest financing for technology development and commercialization) for high-tech firms. In this paper, the direct and interaction impact of both incentives on small firms in Iran has been analyzed by employing the factorial design approach. We compare the use of both incentives in three sectors including biotechnology (BIO), information and communications technology (ICT), and electrical and electronics (ELECT). Test results show the differential effects of incentives in each sector. Therefore, designing policy instruments for Iranian firms requires that these instruments be considered according to the terms and characteristics of firms in each field.

Suggested Citation

  • Sepehr Ghazinoory & Zahra Hashemi, 2023. "The Impact of Government Interventions on the Performance of Biotechnology, Information and Communications Technology, and Electrical and Electronics Firms: Evidence from Iran," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 735-751, June.
    • Handle: RePEc:spr:jknowl:v:14:y:2023:i:2:d:10.1007_s13132-021-00882-y
    DOI: 10.1007/s13132-021-00882-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-021-00882-y
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-021-00882-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rufin Baghana & Pierre Mohnen, 2009. "Effectiveness of R&D tax incentives in small and large enterprises in Québec," Small Business Economics, Springer, vol. 33(1), pages 91-107, June.
    2. Czarnitzki, Dirk & Hanel, Petr & Rosa, Julio Miguel, 2011. "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms," Research Policy, Elsevier, vol. 40(2), pages 217-229, March.
    3. Xulia González & Jordi Jaumandreu & Consuelo Pazo, 2005. "Barriers to Innovation and Subsidy Effectiveness," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 930-949, Winter.
    4. Boris Lokshin & Pierre Mohnen, 2012. "How effective are level-based R&D tax credits? Evidence from the Netherlands," Applied Economics, Taylor & Francis Journals, vol. 44(12), pages 1527-1538, April.
    5. Czarnitzki, Dirk & Fier, Andreas, 2002. "Do Innovation Subsidies Crowd Out Private Investment? Evidence from the German Service Sector," ZEW Discussion Papers 02-04, ZEW - Leibniz Centre for European Economic Research.
    6. 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.
    7. repec:prs:ecstat:estat_0336-1454_2017_num_493_1_10768 is not listed on IDEAS
    8. Almus, Matthias & Czarnitzki, Dirk, 2003. "The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 226-236, April.
    9. Dirk Czarnitzki & Cindy Lopes-Bento, 2014. "Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany," Industry and Innovation, Taylor & Francis Journals, vol. 21(5), pages 380-409, July.
    10. Hottenrott, Hanna & Lopes-Bento, Cindy, 2014. "(International) R&D collaboration and SMEs: The effectiveness of targeted public R&D support schemes," Research Policy, Elsevier, vol. 43(6), pages 1055-1066.
    11. Vincent Dortet-Bernardet & Michael Sicsic, 2017. "The effect of R&\mathsemicolonD subsidies and tax incentives on employment: an evaluation for small firms in France," Post-Print hal-04134737, HAL.
    12. Isabel Busom & Beatriz Corchuelo & Ester Martínez-Ros, 2014. "Tax incentives… or subsidies for business R&D?," Small Business Economics, Springer, vol. 43(3), pages 571-596, October.
    13. Joosung Jun, 2017. "Tax incentives and tax base protection in developing countries," MPDD Working Paper Series WP/17/07, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    14. Adão António Nunes Carvalho, 2011. "Why are tax incentives increasingly used to promote private R&D?," CEFAGE-UE Working Papers 2011_04, University of Evora, CEFAGE-UE (Portugal).
    15. Yohei Kobayashi, 2014. "Effect of R&D tax credits for SMEs in Japan: a microeconometric analysis focused on liquidity constraints," Small Business Economics, Springer, vol. 42(2), pages 311-327, February.
    16. Miotti, Luis & Sachwald, Frederique, 2003. "Co-operative R&D: why and with whom?: An integrated framework of analysis," Research Policy, Elsevier, vol. 32(8), pages 1481-1499, September.
    17. Dirk Czarnitzki & Georg Licht, 2006. "Additionality of public R&D grants in a transition economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(1), pages 101-131, March.
    18. Cappelen, Ådne & Raknerud, Arvid & Rybalka, Marina, 2012. "The effects of R&D tax credits on patenting and innovations," Research Policy, Elsevier, vol. 41(2), pages 334-345.
    19. Reza Naghizadeh & Shaban Elahi & Manoochehr Manteghi & Sepehr Ghazinoory & Marina Ranga, 2015. "Through the magnifying glass: an analysis of regional innovation models based on co-word and meta-synthesis methods," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(6), pages 2481-2505, November.
    20. Vincent Dortet-Bernadet & Michaël Sicsic, 2017. "The effect of R&D subsidies and tax incentives on employment: an evaluation for small firms in France," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 493, pages 5-22.
    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. Emmanuel Chavez, 2020. "The Effects of R&D Tax Credits and Subsidies onPrivate R&D in Mexico (Chapter 2)," PSE Working Papers halshs-02652063, HAL.
    2. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
    3. Dai, Xiaoyong & Chapman, Gary, 2022. "R&D tax incentives and innovation: Examining the role of programme design in China," Technovation, Elsevier, vol. 113(C).
    4. Bianchi, Mattia & Murtinu, Samuele & Scalera, Vittoria G., 2019. "R&D Subsidies as Dual Signals in Technological Collaborations," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    5. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    6. Enrico Vanino & Stephen Roper & Bettina Becker, 2020. "Knowledge to Money: Assessing the Business Performance Effects of Publicly Funded R&D Grants," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(04), pages 20-24, January.
    7. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    8. Thomas H. W. Ziesemer, 2021. "The Effects of R&D Subsidies and Publicly Performed R&D on Business R&D: A Survey," Hacienda Pública Española / Review of Public Economics, IEF, vol. 236(1), pages 171-205, March.
    9. Blandinieres, Florence & Steinbrenner, Daniela, 2021. "How does the evolution of R&D tax incentives schemes impact their effectiveness? Evidence from a meta-analysis," ZEW Discussion Papers 21-020, ZEW - Leibniz Centre for European Economic Research.
    10. Huergo, Elena & Moreno, Lourdes, 2017. "Subsidies or loans? Evaluating the impact of R&D support programmes," Research Policy, Elsevier, vol. 46(7), pages 1198-1214.
    11. OKAMURO, Hiroyuki & SAKUMA, Yohei, 2021. "The Effects of R&D Tax Incentive Reform on R&D Expenditures: The Case of 2009 Reform in Japan," TDB-CAREE Discussion Paper Series E-2021-04, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    12. Bettina Becker, 2015. "Public R&D Policies And Private R&D Investment: A Survey Of The Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 917-942, December.
    13. Labeaga, José M. & Martínez-Ros, Ester & Sanchis, Amparo & Sanchis, Juan A., 2021. "Does persistence in using R&D tax credits help to achieve product innovations?," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    14. Syoum Negassi & Jean-Francois Sattin, 2014. "Evaluation of Public R&D Policy: A Meta-Regression Analysis," Working Papers 14-09, University of Delaware, Department of Economics.
    15. Dirk Czarnitzki & Cindy Lopes-Bento, 2014. "Innovation Subsidies: Does the Funding Source Matter for Innovation Intensity and Performance? Empirical Evidence from Germany," Industry and Innovation, Taylor & Francis Journals, vol. 21(5), pages 380-409, July.
    16. Czarnitzki, Dirk & Lopes-Bento, Cindy, 2013. "Value for money? New microeconometric evidence on public R&D grants in Flanders," Research Policy, Elsevier, vol. 42(1), pages 76-89.
    17. Basit Shoaib Abdul & Kuhn Thomas & Ahmed Mumtaz, 2018. "The Effect of Government Subsidy on Non-Technological Innovation and Firm Performance in the Service Sector: Evidence from Germany," Business Systems Research, Sciendo, vol. 9(1), pages 118-137, March.
    18. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2015. "UK and EU subsidies and private R&D investment: Is there input additionality?," MPRA Paper 68009, University Library of Munich, Germany, revised 16 Nov 2015.
    19. Aiello, Francesco & Albanese, Giuseppe & Piselli, Paolo, 2017. "Public R&D support in Italy. Evidence from a new firm-level patent data set," MPRA Paper 77955, University Library of Munich, Germany.
    20. Bronzini, Raffaello & Piselli, Paolo, 2016. "The impact of R&D subsidies on firm innovation," Research Policy, Elsevier, vol. 45(2), pages 442-457.

    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:spr:jknowl:v:14:y:2023:i:2:d:10.1007_s13132-021-00882-y. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.