Will the real R&D employees please stand up? Effects of tax breaks on firm level outcomes

Irem Guceri ()
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Irem Guceri: Oxford University Centre for Business Taxation

No 1602, Working Papers from Oxford University Centre for Business Taxation

Abstract: This paper evaluates the effect of R&D tax incentives in a quasi-experimental setting. I identify the impact by exploiting a reform in UK policy which increased the SME threshold from 250 to 500 employees. First, I provide evidence that tax incentives help to increase R&D spending at the company level, and the effect translates to a user cost elasticity of -1.18. Second, R&D generated through the reform may be attributable to an increase in the number of R&D employees. I use R&D survey data for which the companies do not have an incentive to relabel their ordinary spending as R&D.

Keywords: R&D; tax credits; difference-in-differences (search for similar items in EconPapers)
JEL-codes: H25 O30 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ino, nep-lab, nep-pbe, nep-sbm and nep-tid
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Citations: View citations in EconPapers (3)

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