Academy of Innovation and Entrepreneurship edition:6 location:Oxford, UK date:29-30 August 2013
This paper sets out to investigate whether firms learn from their peers with respect to managing the R&D process. We do this by considering to what extent firms with similar economic activities and located in the same region mimic peers’ adoption of newly introduced tax credits for R&D, independent from other explanations such as unobserved correlated effects. Using hazard rate models on a dataset of R&D active Belgian companies, we find that there are significant regional and industry-level peer effects from firms that have accessed tax credits on the other enterprises’ probability of doing the same in the future. Specifically, the more companies access tax credits within an industry and region, the higher the probability of their peers doing so in subsequent years. Due to known issues with the econometric identification of peer effects, we use various specifications in order to check the robustness of our results.