R&D tax credits and their macroeconomic impact in the EU: an assessment using QUEST III
Miguel Sanchez-Martinez (),
Cristiana Benedetti-Fasil (),
Peder Christensen () and
Nicolas Robledo-Bottcher ()
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Cristiana Benedetti-Fasil: European Commission – JRC, https://joint-research-centre.ec.europa.eu/index_en
Peder Christensen: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Nicolas Robledo-Bottcher: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
No JRC108931, JRC Research Reports from Joint Research Centre (Seville site)
R&D tax credits are currently used by 25 Member States as a means to stimulate R&D investment and, ultimately, economic growth and employment. This paper is a first attempt to provide an in-depth analysis of the structural economic factors that, other things equal, affect or condition the potential macroeconomic impacts of expanding (or start implementing) R&D tax credit schemes. The analysis is based on the European Commission's QUEST III semi-endogenous growth model. Our main conclusion is that, while the short and medium-term impacts of increased R&D tax credits on Member States' GDP and other macroeconomic aggregates are overall significantly positive, there remains space to substantially improve the cost-effectiveness of these policies.
Keywords: R&D tax credits; innovation; economic growth; macroeconomic modelling (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:iptwpa:jrc108931
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