The Resource Corporate taxation and the quality of research and development

Corporate taxation and the quality of research and development

Label
Corporate taxation and the quality of research and development
Title
Corporate taxation and the quality of research and development
Creator
Subject
Language
eng
Summary
This paper examines the impact of tax incentives on corporate research and development (R&D) activity. R&D tax incentives are commonly provided as special tax allowances or tax credits. In recent years, several countries also reduced their income tax rates on R&D output with the purpose to foster R&D activity. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. This article assesses the impact of corporate tax incentives on the quality of R&D projects, i.e., their innovativeness and earnings potential. Using rich data on corporate patent applications to the European patent office, the authors find that a low tax rate on patent income raises the average profitability and innovation level of the projects undertaken in a country. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. Generous R&D tax credits and tax allowances are in contrast found to exert a negative impact on project quality
Citation source
In: International tax and public finance. - New York. - Vol. 21 (2014), no. 4 ; p. 694-719
http://library.link/vocab/creatorName
  • Ernst, C. (Christof)
  • Richter, K. (Katharina)
  • Riedel, N
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • corporate income tax
  • research and development
  • tax incentive
  • tax rate
  • patent
Label
Corporate taxation and the quality of research and development
Instantiates
Publication
Label
Corporate taxation and the quality of research and development
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.37366609999999 4.9336932
Processing Feedback ...