The Review of Economics and Statistics Vol. 99 No. 3 2017
The Effectiveness of R&D Tax Credits
Abstract
In order to measure the effect of tax credits on private R&D investment, researchers confront the difficult problem of finding an exogenous measure of tax policy that exhibits sufficient variation to support robust identification. This paper takes a new approach based on exploiting differences in the average capital-labor ratio of R&D investment across industries and variation in the tax treatment of different expenditure types across countries and over time. The estimated short-run elasticity is 0.50 which is somewhat more than double previous estimates derived from cross-country analysis.
- DOI
- 10.1162/rest_a_00559
- Volume
- 99
- Issue
- 3
- Pages
- 544-549
- Language
- en
- Sources
- openalex crossref