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A stimulus programme allowed firms in Italy to receive tax credits for R&D expenditure in 2009. Among traditional firms, liquidity is relevant to the response to the stimulus: recipients firms with relative large cash holdings raised R&D expenditure, while those with low liquidity did not vary it. High‐tech firms did not change their total R&D, consistent with their tendency to smooth R&D expenditure through time, though they changed its composition in favour of outsourcing activity and to the detriment of employment. When the fiscal stimulus pushed R&D higher, it also induced a positive transitory effect on the firm's performance.
Acconcia et al. (Wed,) studied this question.