Will the real R&D employees please stand up? Effects of tax breaks in firm level outcomes

Guceri, Irem Will the real R&D employees please stand up? Effects of tax breaks in firm level outcomes. Centre for Business Taxation WP 16/02, University of Oxford.

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Abstract

This paper evaluates the effect of R&D tax incentives in a quasi-experimental setting. I identify the impact by exploiting a reform in UK policy which increased the SME threshold from 250 to 500 employees. First, I provide evidence that tax incentives help to increase R&D spending at the company level, and the effect translates to a user cost elasticity of -1.18. Second, R&D generated through the reform may be attributable to an increase in the number of R&D employees. I use R&D survey data for which the companies do not have an incentive to re-label their ordinary spending as R&D

Item Type: Other Working Paper
Additional Information: JEL Classification: H25, O30
Keywords: R&D, tax credits, difference-in-differences
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 05 May 2016 14:41
Last Modified: 05 May 2016 14:41
Funders: ESRC under grant ES/L000016/1
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6152

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