EconPapers    
Economics at your fingertips  
 

Respect Your Elders: Evidence from Ireland’s R&D Tax Credit Reform

Jean Acheson and Rory Malone
Additional contact information
Jean Acheson: Office of the Revenue Commissioners, Dublin
Rory Malone: Former Department of Finance, Dublin

The Economic and Social Review, 2020, vol. 51, issue 1, 105-131

Abstract: This paper exploits a unique reform in Irish corporation tax policy to evaluate the effect of tax incentives on research and development (R&D) investment. Using administrative panel data from the Revenue Commissioners, we establish for the first time the additional R&D investment that arises from the provision of the tax credit and we examine the associated firm characteristics. We find that the tax incentive helped to increase R&D investment by firms; however, the estimated effect is driven by older firms rather than younger firms. The latter result challenges a common narrative on the role of R&D tax incentives which increase cashflow for young firms: it suggests that their barriers to innovation may not necessarily be financial, and that age-targeted tax incentives could carry large deadweight.

Keywords: corporation tax; research and development; Ireland (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://www.esr.ie/article/view/1388/272 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eso:journl:v:51:y:2020:i:1:p:105-131

Access Statistics for this article

More articles in The Economic and Social Review from Economic and Social Studies
Bibliographic data for series maintained by Aedin Doris ().

 
Page updated 2022-08-31
Handle: RePEc:eso:journl:v:51:y:2020:i:1:p:105-131