The Effectiveness of R&D Tax Credits: Cross-Industry Evidence
Russell Thomson ()
Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
This paper presents new estimates of the efficacy of R&D tax incentives using cross-countrycross-industry data and a novel measure of tax policy that incorporates differences in the average capital–labour ratio in R&D investment across industries and variation in the tax treatment of different expenditure types across countries and over time. The results suggest that, in the short run, industry increases R&D investment by 0.24 dollars for every dollar of tax revenue forgone. The results appear to be more robust than estimates based on crosscountry or firm-level data.
Keywords: Innovation policy; R&D tax credits; determinants of R&D investment (search for similar items in EconPapers)
JEL-codes: E22 O31 O57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-ino, nep-mac, nep-pbe and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2013n18
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