Empirical examination of whether R&D subsidies crowd out private investments has been hampered by selection problems. A particular worry is that project quality and research intentions may be correlated with the likelihood of receiving subsidies. Using proposal evaluation data to control for...

To what extent does a tax credit affect firms ́R&D activity? What are the mechanisms? This paper examines the effect of R&D tax credits on firms ́R&D expenditure by exploiting the variation across firms in the changes in the eligible tax credit rate between 2000 and 2003. Estimating the...

This study examines the availability and incentive effects of the Research and Experimentation tax credit following structural changes in the computation of the credit enacted in the Omnibus Budget Reconciliation Act of 1989 (OBRA89). We find that overall firm eligibility declined after OBRA89,...

To what extent does a tax credit affect firms' R&D activity? What are the mechanisms? This paper examines the effect of R&D tax credits on firms' R&D expenditure by exploiting the variation across firms in the changes in the eligible tax credit rate between 2000 and 2003. Estimating the...

11 European countries now operate IP Box regimes that provide substantially reduced rates of corporate tax for income derived from important forms of intellectual property. We incorporate these policies into forward-looking measures of the cost of capital, effective marginal tax rates and...

Previous work suggests that research and development (R&D) tax credits increase R&D expenditure. We exploit the staggered adoption of state-level R&D tax credits in the United States to examine their effect on innovation itself. In particular, we consider ten commonly-studied patent...

The integrated circuit (IC) industry's role in promoting sustained economic growth makes it highly valued by governments worldwide. Based on the late-mover advantage and market failure theories, this study demonstrates the importance of government intervention in industrial technological...

We study how profit taxation affects plants' R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987-2013 for...