Kopafbeelding publicaties CPB

More R&D with tax incentives? A meta-analysis

CPB Discussion Paper 309, 8 June 2015

R&D tax incentives are widely used to stimulate private R&D. We review their effectiveness using meta regression analysis. The literature mainly consists of two families of micro-econometric studies.

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The first family (16 studies with 82 estimates by the end of 2014) estimates the elasticity between the user cost of R&D capital and private R&D expenditure (stock or flow). Correlations between R&D expenditure and the presence of an R&D tax incentive scheme are provided by the second family (9 studies with 95 estimates). For both types of studies we find strong evidence of publication bias. After correcting for this, we find that a reduction in the user cost of capital of ten percent raises stock of R&D capital by 1.3 percent and flow of R&D expenditure by 2.1 percent. For the second family we find that presence of a scheme is associated with seven percent more R&D expenditure.

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