Tax incentives for R&D and firm dynamics (in Finnish with English abstract and summary)

We compare different tax incentive schemes for private R&D investments using a numerical model of R&D-investments and firm dynamics. We find that tax incentives that are based on the incremental annual spending increase firms’ R&D spending much more than tax incentives that are based on the level of R&D spending. However, incremental incentives also distort the allocation of R&D personnel across different firms much more than level-based tax incentives. This effect tends to lower aggregate output. We also find that whether the tax benefits are targeted to only profit-making firms, which pay corporate income tax, or given to all firms, does not make a big difference in terms of aggregate R&D spending or aggregate output.

Information om publikationen

Serie
Discussion Papers no. 1065
Nyckelord
tutkimus ja kehitys, verokannustimet, yritysdynamiikka
Nyckelord
research and development, tax incentives, firm dynamics
JEL
H25,O38,L11
Sidor
23
Pris
10 €
Tillgänglighet av tryckt version
Tillgänglig
Språk
Finska