The Resource What does it take for an R&D tax incentive policy to be effective?
What does it take for an R&D tax incentive policy to be effective?
Resource Information
The item What does it take for an R&D tax incentive policy to be effective? represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.This item is available to borrow from 1 library branch.
Resource Information
The item What does it take for an R&D tax incentive policy to be effective? represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.
This item is available to borrow from 1 library branch.
- Summary
- While in 1996, 12 OECD countries offered research and development (R&D) tax incentives, in 2008 this number increased to 21. Most countries have opted for level-based instead of incremental R&D tax incentives. This paper takes a critical look at how the effectiveness of R&D tax incentives has been assessed in recent evaluations. Whether based on structural models estimating a price elasticity of R&D or on treatment evaluation methods, most studies estimate the cost effectiveness ratio or additionality. If the cost effectiveness ratio is greater than 1, or firms do more R&D than before, the policy is considered to be effective. A more proper net welfare evaluation of this policy should also include administration, compliance and transfer costs, the marginal burden of taxation, as well R&D externalities and the indirect effects on innovation and productivity. The net welfare gain is shown to be sensitive to a certain number of parameters that are not always estimated with great precision. In particular, the transfer cost or deadweight loss associated with level-based tax incentives is shown to depend on the size of the firm, or more precisely its ex-ante R&D level. The authors report on the success of past policy changes in the Netherlands and simulate the effect of various parameter changes in the existing Dutch R&D tax incentive scheme. They show that introducing marginal changes in the schemes' parameters has little impact of increased R&D spending. The policy is more effective for small firms than for large firms. They end with a discussion of the pros and cons of level-based versus incremental R&D tax incentives
- Language
- eng
- Extent
- 28 p.
- Label
- What does it take for an R&D tax incentive policy to be effective?
- Title
- What does it take for an R&D tax incentive policy to be effective?
- Language
- eng
- Summary
- While in 1996, 12 OECD countries offered research and development (R&D) tax incentives, in 2008 this number increased to 21. Most countries have opted for level-based instead of incremental R&D tax incentives. This paper takes a critical look at how the effectiveness of R&D tax incentives has been assessed in recent evaluations. Whether based on structural models estimating a price elasticity of R&D or on treatment evaluation methods, most studies estimate the cost effectiveness ratio or additionality. If the cost effectiveness ratio is greater than 1, or firms do more R&D than before, the policy is considered to be effective. A more proper net welfare evaluation of this policy should also include administration, compliance and transfer costs, the marginal burden of taxation, as well R&D externalities and the indirect effects on innovation and productivity. The net welfare gain is shown to be sensitive to a certain number of parameters that are not always estimated with great precision. In particular, the transfer cost or deadweight loss associated with level-based tax incentives is shown to depend on the size of the firm, or more precisely its ex-ante R&D level. The authors report on the success of past policy changes in the Netherlands and simulate the effect of various parameter changes in the existing Dutch R&D tax incentive scheme. They show that introducing marginal changes in the schemes' parameters has little impact of increased R&D spending. The policy is more effective for small firms than for large firms. They end with a discussion of the pros and cons of level-based versus incremental R&D tax incentives
- http://library.link/vocab/creatorName
-
- Mohnen, P
- Lokshin, B
- Geographic coverage
- International
- Index
- no index present
- Language note
- English
- Literary form
- non fiction
- Series statement
- Série Scientifique = Scientific Series
- http://library.link/vocab/subjectName
-
- OECD
- R&D
- tax credit
- tax incentive
- Label
- What does it take for an R&D tax incentive policy to be effective?
- Extent
- 28 p.
- Label
- What does it take for an R&D tax incentive policy to be effective?
- Extent
- 28 p.
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<div class="citation" vocab="http://schema.org/"><i class="fa fa-external-link-square fa-fw"></i> Data from <span resource="http://link.library.ibfd.org/portal/What-does-it-take-for-an-RD-tax-incentive-policy/EGbeuiThcLE/" typeof="Book http://bibfra.me/vocab/lite/Item"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/portal/What-does-it-take-for-an-RD-tax-incentive-policy/EGbeuiThcLE/">What does it take for an R&D tax incentive policy to be effective?</a></span> - <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>
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<div class="citation" vocab="http://schema.org/"><i class="fa fa-external-link-square fa-fw"></i> Data from <span resource="http://link.library.ibfd.org/portal/What-does-it-take-for-an-RD-tax-incentive-policy/EGbeuiThcLE/" typeof="Book http://bibfra.me/vocab/lite/Item"><span property="name http://bibfra.me/vocab/lite/label"><a href="http://link.library.ibfd.org/portal/What-does-it-take-for-an-RD-tax-incentive-policy/EGbeuiThcLE/">What does it take for an R&D tax incentive policy to be effective?</a></span> - <span property="potentialAction" typeOf="OrganizeAction"><span property="agent" typeof="LibrarySystem http://library.link/vocab/LibrarySystem" resource="http://link.library.ibfd.org/"><span property="name http://bibfra.me/vocab/lite/label"><a property="url" href="http://link.library.ibfd.org/">International Bureau of Fiscal Documentation</a></span></span></span></span></div>
