Tax Credits and Small Firm R&D Spending
نویسندگان
چکیده
We use a change in Canadian tax law to examine how small private firms respond to the R&D tax credit. Our estimates imply an R&D user-cost elasticity above unity. Contract R&D expenditures are more elastic than the R&D wage bill. Firms that perform contract research or recently invested in R&D capital are more responsive to a change in the after-tax cost of R&D. We interpret the latter findings as evidence of adjustment costs. JEL: O38, H25, D83
منابع مشابه
Do Tax Credits Stimulate R&D Spending? The Effect of the R&D Tax Credit in its First Decade
This paper examines the impact of the R&D tax credit between 1981-1991 using confidential IRS data from corporate tax returns. This paper makes two key advances on previous work. First, this paper implements a new instrumental variables (IV) strategy based on tax changes that directly addresses the simultaneity of R&D spending and marginal credit rates. Second, it makes use of new restricted-ac...
متن کاملTax Incentives and R&D Activity: Firm-Level Evidence from Taiwan
This paper investigates the effect of tax incentives on R&D activities in Taiwanese manufacturing firms. Specifically, we assess the potential R&D-enhancing effect on recipients of R&D tax credits compared with their non-recipient counterparts. Moreover, the potential difference in the R&D-enhancing effect between high-tech and non-high-tech firms is also examined. Utilizing a firm-level panel ...
متن کاملFEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES Beggar thy Neighbor? The In-State, Out-of-State, and Aggregate Effects of R&D Tax Credits
The proliferation of R&D tax incentives among U.S. states in recent decades raises two important questions: (1) Are these tax incentives e¤ective in achieving their stated objective, to increase R&D spending within the state? (2) To the extent the incentives do increase R&D within the state, how much of this increase is due to drawing R&D away from other states? In short, this paper answers (1)...
متن کاملTax Policy and Firms’ Productivity in Emerging Economies: Evidence from Taiwan
This paper investigates the effect of tax policy on productivity in Taiwanese manufacturing firms for the period 2001 to 2008. We first adopt the dynamic random effect (RE) probit model to analyze the determinants of a firm’s decision as to whether or not to apply for tax credits. The results show that the causal effect from past tax credits usage to current tax credits usage exists across indu...
متن کاملDo R&D tax credits work? Evidence from a panel of countries 1979¬タモ1997
This paper examines the impact of fiscal incentives on the level of R&D investment. An econometric model of R&D investment is estimated using a new panel of data on tax changes and R&D spending in nine OECD countries over a 19-year period (1979–1997). We find evidence that tax incentives are effective in increasing R&D intensity. This is true even after allowing for permanent country-specific c...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2017