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Thinking Inside The Box: Policies Towards Footloose R&D Intensive Firms

Date: 29th March 2019
Time: 14:00
Location: KB1-11, First Floor, Kemmy Business School

Department of Economics Seminar


Dr Dermot Leahy

Department of Economics, Maynooth University




"Thinking Inside The Box: Policies Towards Footloose R&D Intensive Firms"


Date:   Friday 29th March, 14h00-15h00
Venue:   Kemmy Business School, KB1-11


All are welcome to attend.



Dermot Leahy obtained his PhD in Economics in 1994 from University College Dublin (UCD). He taught at the University of Birmingham (1994-1995) and UCD (1995-2007), before joining the Department of Economics, Finance and Accounting at Maynooth University in 2007.  His research interests are in International Trade and Industrial Organization.


Designing policies for its R&D-intensive footloose firms, a government uses a combination of a R&D subsidy and an effective corporate tax rate. While a Pigovian R&D-subsidy to a large R&D-intensive firm is warranted as it internalises the domestic R&D-spillover, it also increases the incentive to offshore production. Since offshoring enables the firm to transfer price and pay taxes abroad, its home government is constrained by the need to safeguard tax revenue. We find that higher R&D subsidies to R&D-intensive firms with footloose production should not be financed by higher corporate taxes and may require an optimal reduced effective corporate tax rate
Department of Economics Seminars