## Firm-Level Innovation in Spain: Patterns, Drivers and Policy Implications

_Selected Issues Papers, June 29, 2026_

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## Bibliographic details
- Authors: Younghun Shim, Isabel Figueiras, Carlo Pizzinelli
- Published: June 29, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229049566.018

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### Key findings
- Spain’s productivity growth has picked up in recent years, but a sizable gap with other high-income countries remains.
- Spain exhibits a large innovation gap vis-à-vis peer countries.
- Firm-level evidence shows the innovation gap is particularly pronounced among young firms.
- The innovation gap widens for higher-quality patents.
- The R&D tax credit is described as "generous on paper yet has low take-up rate."

### Constraints and drivers of innovation
- Size-dependent regulations.
- Financial constraints.
- Regulatory burdens.
- Complexity of the R&D tax credit.

### Quantitative simulations and projected impact
- Quantitative simulations based on an endogenous growth model suggest that easing these frictions could raise Spain’s long-term total factor productivity growth by over 0.25 percentage points.

### Subject tags and keywords (as presented)
- Subject: Employment, Labor, Production, Productivity, Tax allowances, Taxes, Total factor productivity
- Keywords: Employment, financial frictions, IMF country, Innovation, Productivity, R&D tax credit, R&D tax credits, size-dependent regulations, take-up rate, Tax allowances, Total factor productivity, total factor productivity growth, vis-à-vis peer

*International Monetary Fund.*

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/26/firm-level-innovation-in-spain-patterns-drivers-and-policy-implications-577345_