The Effects of R&D Tax Incentive Reform on R&D Expenditures: The Case of 2009 Reform in Japan

Hiroyuki Okamuro and Yohei Sakuma

No E-2021-04, TDB-CAREE Discussion Paper Series from Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University

Abstract: Tax incentives have been implemented in several countries, including Japan, to promote research and development (R&D). Several previous studies evaluate the effects of R&D tax incentives on R&D expenditures, but few address the changes in its conditions. This study fills this gap by focusing on the tax incentive reform in Japan in 2009 and using a comprehensive panel data set of Japanese corporations (TDB COSMOS1). Using DID and fixed-effect panel analyses, we found a positive and significant effect of enhancing the deduction ratio ceiling but not extending the carryover period on R&D expenditures.

Keywords: R&D; tax incentive reform; policy evaluation; Japan (search for similar items in EconPapers)
JEL-codes: H25 L25 O32 O38 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021-08
New Economics Papers: this item is included in nep-acc, nep-isf and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:hit:tdbcdp:e-2021-04

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