Measuring the Effectiveness of R&D tax credits in the Netherlands

Lokshin, Boris and Mohnen, Pierre (2007). Measuring the Effectiveness of R&D tax credits in the Netherlands. UNU-MERIT.

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  • Author Lokshin, Boris
    Mohnen, Pierre
    Title Measuring the Effectiveness of R&D tax credits in the Netherlands
    Publication Date 2007
    Publisher UNU-MERIT
    Abstract This paper examines the impact of the Dutch R&D fiscal incentive program, known as WBSO, on R&D capital formation. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. An econometric model is estimated using a rich unbalanced panel covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we examine the impact of the R&D incentive program. We find evidence that the program of R&D incentives in the Netherlands has been effective in reducing the user cost of R&D and in stimulating firms' investment in R&D.
    Keyword R&D tax credits
    Panel data
    Crowding out
    User-cost elasticity
    JEL O32
    O38
    H25
    H50
    C23
    Copyright Holder UNU-MERIT
    Copyright Year 2007
    ISSN 1871-9872
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    Created: Wed, 11 Dec 2013, 15:47:43 JST