The efficiency of direct payments versus tax reductions under uncertainty

This paper analyzes the optimal behavior of farmers in the presence of direct payments and uncertainty. In an empirical analysis for Switzerland, it confirms previously obtained theoretical results and determines the magnitude of the theoretical predicted effects. The results show that direct payments increase agricultural production between 3.7% to 4.8%. Alternatively to direct payments, the production effect of tax reductions is evaluated in order to determine its magnitude. The empirical analysis corroborates the theoretical results of the literature and demonstrates that tax reductions are also distorting, but to a substantially lesser degree if losses are not offset. However, tax reductions, independently whether losses are offset or not, lead to higher government spending than pure direct payments

Innovation strategies in the presence of technology markets: evidence from spanish innovative firms

The development of markets for technology has eased the acquisition of technology and reshaped the innovation strategies of firms that we classify as producers of innovations or as imitators. Innovative activities of firms include research, acquisition of technology and downstream activities. Within an industry, firms producing innovations tend to conduct more research and downstream activities than those imitating innovations. Acquisition of technology is equally important for both. To implement innovation strategies, firms producing innovations require both the capability to scan the external environment for technology and the capability to integrate new technology. Firms producing innovations require both, while firms imitating innovations require scan capabilities only