Should Finland Introduce an R&D Tax Credit? Reflections Based on Norwegian R&D Tax Policy

Jarle Møen

No 1097, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: Subsidies to commercial R&D can be given as R&D tax credits or through direct grants. Tax incentives have become an increasingly popular policy tool over the last decades. In this note I discuss the pros and cons of the two forms of subsidies in light of Norways experience with R&D policy. I review an ongoing evaluation of the Norwegian R&D tax credit introduced in 2002 and reflect on whether it is desirable for Finland to introduce a similar scheme. I suggest that this is not desirable. If Finland introduces an R&D tax credit, I argue that it should be limited to small and medium sized companies.

Keywords: R&D policy; R&D subsidy; R&D tax credit; Finland; Norway (search for similar items in EconPapers)
JEL-codes: H25 O38 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2007
New Economics Papers: this item is included in nep-eec, nep-ino and nep-pbe
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