@article{Colombo_2019, title={BRAZILIAN INNOVATION TAX POLICY AND INTERNATIONAL INVESTMENT: EVIDENCE FROM UNITED STATES MULTINATIONALS AND INTERNATIONAL PATENT APPLICATIONS}, volume={37}, url={https://seer.ufrgs.br/index.php/AnaliseEconomica/article/view/75570}, DOI={10.22456/2176-5456.75570}, abstractNote={In the last decades, multinational enterprises (MNEs) have increased<br />their internationalization levels of innovation activities. Brazil has benefited from<br />such changes and received increasing investment from MNEs. In 2005, the federal<br />government approved new tax incentives (Law 11,196/05) to foster business innovation<br />in the country by reducing the tax cost of research and development (R&D) activities.<br />This paper investigates whether these tax breaks have attracted ‘footloose R&D’,<br />diverting international investment from other economies. After a literature review<br />on locational factors for R&D attraction and an analysis of the Brazilian case, an<br />econometric model is presented, using data on R&D investment by U.S. MNEs and<br />priority patent applications. No evidence that Brazilian tax incentives have attracted<br />international R&D from alternative host countries is found. This result is in accordance<br />with previous research suggesting international R&D performed in Brazil is mainly<br />adaptive and support-oriented and, for this reason, tax incentives are not a primary<br />attraction factor. It also suggests that claims that international fiscal competition lead to<br />a zero-sum game may be unfounded for the Brazilian case.}, number={74}, journal={Análise Econômica}, author={Colombo, Daniel Gama e}, year={2019}, month={out.} }