EconPapers    
Economics at your fingertips  
 

Effectiveness of R&D Tax Incentives in Small and Large Enterprises in Quebec

Rufin Baghana and Pierre Mohnen ()

No 2009-001, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: In this paper we evaluate the effectiveness of R&D tax incentives in Quebec, using manufacturing firm data from 1997 to 2003 originating from R&D surveys, annual surveys of manufactures and administrative data. The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with a slightly higher elasticities for small firms than for large firms. We show that there is a deadweight loss associated with level-based R&D tax incentives that is particularly acute for large firms. For small firms it is not sizeable enough to suppress the R&D additionality, at least not during quite a number of years after the initial tax change. Incremental R&D tax credits do not suffer from this deadweight loss and are from that perspective preferable to level-based tax incentives.

Keywords: R&D; tax credits; tax incentives; price elasticity; research and development; manufacturing industry; Quebec; Canada (search for similar items in EconPapers)
JEL-codes: C23 H25 H50 O32 O38 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38) Track citations by RSS feed

Downloads: (external link)
https://www.merit.unu.edu/publications/wppdf/2009/wp2009-001.pdf (application/pdf)

Related works:
Journal Article: Effectiveness of R&D tax incentives in small and large enterprises in Québec (2009) Downloads
Working Paper: Effectiveness of R&D Tax Incentives in Small and Large Enterprises in Québec (2009) Downloads
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:unm:unumer:2009001

Access Statistics for this paper

More papers in MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) Contact information at EDIRC.
Bibliographic data for series maintained by Ad Notten ().

 
Page updated 2021-06-18
Handle: RePEc:unm:unumer:2009001