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Effectiveness of Fiscal Incentives for R&D : Quasi-Experimental Evidence / Irem Guceri, Li Liu.
- Format:
- Book
- Government document
- Author/Creator:
- Guceri, Irem.
- Series:
- IMF Working Papers; Working Paper ; No. 2017/084
- IMF Working Papers
- Language:
- English
- Subjects (All):
- Finance, Public.
- Physical Description:
- 1 online resource (43 pages) : illustrations, tables.
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2017.
- Summary:
- With growing academic and policy interest in research and development (R&D) tax incentives, the question about their effectiveness has become ever more relevant. In the absence of an exogenous policy reform, the simultaneous determination of companies’ tax positions and their R&D spending causes an identification problem in evaluating tax incentives. To overcome this identification challenge, we exploit a U.K. policy reform and use the population of corporation tax records that provide precise information on the amount of firm-level R&D expenditure. Using difference-in-differences and other panel regression approaches, we find a positive and significant impact of tax incentives on R&D spending, and an implied user cost elasticity estimate of around -1.6. This translates to more than a pound in additional private R&D for each pound foregone in corporation tax revenue.
- Notes:
- Includes bibliographical references.
- Description based on online resource; title from PDF title page (ebrary, viewed May 5, 2017).
- ISBN:
- 9781475591248
- 1475591241
- 9781475591309
- 1475591306
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