R&D tax incentives in EU countries: does the impact vary with firm size?
This paper studies the effect of R&D tax incentives on the research activity of manufacturing firms based in France, Italy, Spain and the UK, over the period 2007–2009. Using a matching procedure, we show that, in all the examined countries but Spain, R&D tax incentives induced a statistically significant increase in the intensity of R&D expenses over sales. However, this effect is driven only by the behaviour of small firms. By assessing the benefit-cost ratio of R&D tax policies, we find evidence of substantial additional effects in Italy and the UK.
KeywordsR&D Tax incentives Policy evaluation R&D fiscal multiplier
JEL classificationsC21 C26 D04 O32 O38 L26
With the usual disclaimers, we wish to thank two anonymous reviewers for their helpful comments and suggestions.
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