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?

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?
Creator
Subject
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?
Instantiates
Publication
Extent
28 p.
Label
What does it take for an R&D tax incentive policy to be effective?
Publication
Extent
28 p.

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.3736660 4.9336932
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