Impact of research tax credit on R&D and innovation: evidence from the 2008 French reform

Antoine Bozio, D. Irac and Loriane Py

Working papers from Banque de France

Abstract: This paper presents an ex post evaluation of the 2008 reform of the French research tax credit. The tax scheme was massively overhauled, with a switch to a pure volume-based design, leading to a large increase in the number of firms applying and an important increase in the cost of the scheme. Given the timing and the characteristics of the reform, measuring its causal impact is challenging. We have relied on four unique sources of data R&D surveys, administrative tax data, firm characteristics and patent datasets to assess how French firms have reacted to these changes in incentives. Our empirical strategies rest on combining difference in differences with matching methods and taking advantage of the particular way the 2008 reform has affected incentives to invest in R&D. Our results suggest a positive effect of the 2008 reform on R&D at both the intensive margin and extensive margin, but a possible lower impact on innovation than could have been expected.

Keywords: tax credit; evaluation; R&D; innovation. (search for similar items in EconPapers)
JEL-codes: C23 H25 O32 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014
New Economics Papers: this item is included in nep-acc, nep-ino, nep-knm, nep-pbe and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Working Paper: Impact of research tax credit on R&D and innovation: evidence from the 2008 French reform (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:532

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