implicit funding subsidy remain large, in the order of up to 1 percent of GDP, despite decreases in recent years. But the … implicit funding subsidy incentivises debt financing as it lowers private bankruptcy costs. This funding subsidy is passed on …

, a subsidy to R&D capital investments, and a subsidy to bonus pay. When market rivalry prevails over positive knowledge … externalities, a bonus pay incentive was found to obtain the social first-best while a patent box or a subsidy to capital investment … would cause overinvestment. When positive knowledge externalities prevail, either a patent box or a subsidy to capital …