How effective are level-based R&D tax credits? Evidence from the Netherlands
International audience ; This paper examines the impact of the R&D fiscal incentive program on R&D by Dutch firms. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost-benefit analysis of the R&D incentive program. We find some evidence of additionality suggesting that the level-based program o... Mehr ...
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Dokumenttyp: | Artikel |
Erscheinungsdatum: | 2011 |
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Schlagwörter: | Social Sciences & Humanities / [QFIN]Quantitative Finance [q-fin] |
Sprache: | Englisch |
Permalink: | https://search.fid-benelux.de/Record/base-29158091 |
Datenquelle: | BASE; Originalkatalog |
Powered By: | BASE |
Link(s) : | https://hal.science/hal-00677632 |
International audience ; This paper examines the impact of the R&D fiscal incentive program on R&D by Dutch firms. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost-benefit analysis of the R&D incentive program. We find some evidence of additionality suggesting that the level-based program of R&D incentives in the Netherlands is effective in stimulating firms' investment in R&D. However, the hypothesis of crowding out can be rejected only for small firms. The analysis also indicates that the level-based nature of the fiscal incentive scheme leads to a substantial social dead-weight loss.