CIAO DATE: 07/2013
July 2013
Norwegian Institute of International Affairs
This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. The authors 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. Micro-econometric studies that have focused on a sub-sample of high-tech industries have on average obtained a smaller estimated effect of R&D tax credits. The paper proposes a simple framework to investigate why the effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research.
Resource link: Do the effects of R&D tax credits vary across industries? A meta-regression analysis [PDF]