Do the effects of R&D tax credits vary across industries? A meta-regression analysis

By Fulvio Castellacci, C. Lie. 2015

207 citations recorded by the source corpus.

This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. We focus on one specific aspect that has not received sufficient attention in previous research: the sectoral dimension. Our meta-regression analysis (MRA) sets up a new database collecting a large number of firm-level studies on the effects of R&D tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature. The main result of the MRA analysis is indeed that sectors matter. Specifically, the additionality effect of R&D tax credits is on average stronger for SMEs, firms in the service sectors, and firms in low-tech sectors in countries with an incremental scheme. The paper proposes a simple framework to investigate why the innovation and economic effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/317e655825046f3e5c3b3b1ab6438d08e2add5b0

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Citations in the corpus

Additionality or crowding-out? An overall evaluation of public R&D subsidy on private R&D expenditure (2016, unknown): “…because there exist differences in the average additionality effects across industries or between firm size thresholds, as shown, for instance, in Castellacci and Lie (2015) and Guellec (2003), we perform a number of robustness checks (Table 6) to test whether our findings may (i) vary between…”
Innovation policy: What, why, and how (2017, background): “However, while such subsidies may have some positive effects on firms’ R&D investments, particularly in small firms (Castellacci and Mee Lie, 2015), their wider societal effects, e.g. on innovation, productivity, and jobs, are much less certain (Larédo et al. , 2016; Mohnen et al. , 2017, this…”
A TAXONOMY OF GREEN INNOVATORS:EMPIRICAL EVIDENCE FROM SOUTH KOREA (2017, background): “The latter has typically been the focus of environmental policy, whereas the former has provided the foundation of public intervention through innovation and R&D policy (Castellacci and Lie, 2015).”
Sectors and the additionality effects of R&D tax credits: A cross-country microeconometric analysis (2017, background): “Castellacci and Lie (2015) have recently carried out a meta-regression analysis of the R&D tax credits literature, pointing out that the size of the estimated additionality effects also depends on whether or not the studies controlled for industrylevel differences.”