The R&D tax credit in France: assessment and ex ante evaluation of the 2008 reform

B. Mulkay; J. Mairesse

doi:10.1093/oep/gpt019

The R&D tax credit in France: assessment and ex ante evaluation of the 2008 reform

B. Mulkay^*
, J. Mairesse

^*Corresponding author for this work

Mt Economic Research Inst on Innov/Techn

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

This article presents an econometric analysis of the direct effects of the R&D tax credit (RTC) on private R&D in France and proposes an ex ante evaluation of the major reform implemented in 2008. We first estimate an error correction model of a dynamic R&D demand function on a large panel data of R&D doing firms, obtaining a preferred estimate of -0.4 for the long run elasticity of the user cost of R&D capital. We then perform a micro-simulation of the effects of the 2008 RTC reform that shows that the implicit long run budget multiplier would be about 0.7.

Original language	English
Pages (from-to)	746-766
Number of pages	21
Journal	Oxford Economic Papers-New Series
Volume	65
Issue number	3
DOIs	https://doi.org/10.1093/oep/gpt019
Publication status	Published - Jul 2013

Keywords

PANEL-DATA
DYNAMIC-MODELS
INVESTMENT

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10.1093/oep/gpt019

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abstract = "This article presents an econometric analysis of the direct effects of the R\&D tax credit (RTC) on private R\&D in France and proposes an ex ante evaluation of the major reform implemented in 2008. We first estimate an error correction model of a dynamic R\&D demand function on a large panel data of R\&D doing firms, obtaining a preferred estimate of -0.4 for the long run elasticity of the user cost of R\&D capital. We then perform a micro-simulation of the effects of the 2008 RTC reform that shows that the implicit long run budget multiplier would be about 0.7.",

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AB - This article presents an econometric analysis of the direct effects of the R&D tax credit (RTC) on private R&D in France and proposes an ex ante evaluation of the major reform implemented in 2008. We first estimate an error correction model of a dynamic R&D demand function on a large panel data of R&D doing firms, obtaining a preferred estimate of -0.4 for the long run elasticity of the user cost of R&D capital. We then perform a micro-simulation of the effects of the 2008 RTC reform that shows that the implicit long run budget multiplier would be about 0.7.

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KW - DYNAMIC-MODELS

KW - INVESTMENT

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JO - Oxford Economic Papers-New Series

JF - Oxford Economic Papers-New Series

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ER -

The R&D tax credit in France: assessment and ex ante evaluation of the 2008 reform

Abstract

Keywords

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