What does it take for and R&D tax incentive policy to be effective?

Pierre Mohnen and Boris Lokshin

No 2009/9, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We take a critical look at how to assess the effectiveness of R&D tax incentives. The net welfare gain is shown to be sensitive to a certain number of parameters. In particular, the deadweight loss associated with level-based tax incentives depends on the ex-ante R&D level. We report on the success of a past policy changes and simulate the effect of various parameter changes in the existing Dutch R&D tax incentive scheme. We show that this policy is more effective for small firms than for large firms. We end with a discussion of the pros and cons of volume-based versus incremental R&D tax incentives.

Keywords: R&D tax credits; policy evaluation; cost-benefit analysis. (search for similar items in EconPapers)
JEL-codes: H25 H50 O32 O38 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://ieb.ub.edu/wp-content/uploads/2018/04/2009-IEB-WorkingPaper-09.pdf (application/pdf)

Related works:
Working Paper: What Does it Take for an R&D Tax Incentive Policy to Be Effective? (2009)
Working Paper: What does it take for an R&D tax incentive policy to be effective? (2009)
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:ieb:wpaper:doc2009-9

Access Statistics for this paper

More papers in Working Papers from Institut d'Economia de Barcelona (IEB) Contact information at EDIRC.
Bibliographic data for series maintained by ().