December 19, 2005

How effective are additional tax credits for R&D? A measurement using the social-experiment paradigm

Extra WBSO bevordert R&D bij starters

Press release
Startende bedrijven doen meer research en development (R&D) door de intensivering van de Wet bevordering speur- en ontwikkelingswerk (WBSO). Een euro extra WBSO voor zulke bedrijven leidt tot 50 à 80 eurocent extra R&D-arbeid. Een algemene intensivering van de WBSO waarvan alle bedrijven gebruik kunnen maken, is fors minder effectief.

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Dick Morks

First, an additional tax credit was offered to new and innovating firms: the starters program. And second, the upper bound of the first tax-credit bracket was raised. We stress the importance of identifying a convincing control group in order to assess the causal impact of a policy change.

Each extra euro tax credit spent through the starters program yields about 50 to 80 eurocent extra R&D labour activity. The extension of the first tax-credit bracket yields about 10 to 20 eurocent extra R&D-labour for each additional euro tax credit. Identification of a convincing control group is difficult in the latter case however, casting uncertainty on the estimate.

This publication is in Dutch.


Maarten Cornet
Björn Vroomen

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