Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms(Article)(Open Access)
- aK.U. Leuven, Dept. of Managerial Economics, Strategy and Innovation, Naamsestraat 69, 3000 Leuven, Belgium
- bCentre for European Economic Research (ZEW), Mannheim, Germany
- cUniversity of Sherbrooke, Dept. d'Économique, Sherbrooke, QC J1K 2R1, Canada
- dIndustry Canada, Economic Research and Policy Analysis Branch, Ottawa, ON K1A 0H5, Canada
Abstract
This study examines the effect of R&D tax credits on innovation activities of Canadian manufacturing firms. Over the 1997-1999 period the Federal and Provincial R&D tax credit programs were used by more than one third of all manufacturing firms and by close to two thirds of firms in high-technology sectors. We investigate the average effect of R&D tax credits on a series of innovation indicators such as: number of new products, sales with new products, originality of innovation, etc. using a non-parametric matching approach. Compared to a hypothetical situation in the absence of R&D tax credits, recipients of tax credits show significantly better scores on most but not all performance indicators. We therefore conclude that tax credits lead to additional innovation output. © 2010 Elsevier B.V. All rights reserved.
Indexed keywords
| Engineering uncontrolled terms | High-technologyInnovation activityManufacturing firmsNew productNon-parametricPerformance indicatorsPolicy evaluationPublic subsidiesTax credits |
|---|---|
| Engineering controlled terms: | BenchmarkingCivil aviationEconomic analysisIndustryManufacture |
| Engineering main heading: | Taxation |
Funding details
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1
Dirk Czarnitzki also thanks the University of California at Berkeley for its hospitality, because this paper was partly written during a research visit at the Economics Faculty of the UCB. Financial support by the Volkswagen Stiftung, Germany, is gratefully acknowledged.
- ISSN: 00487333
- CODEN: REPYB
- Source Type: Journal
- Original language: English
- DOI: 10.1016/j.respol.2010.09.017
- Document Type: Article
Czarnitzki, D.; K.U. Leuven, Dept. of Managerial Economics, Strategy and Innovation, Naamsestraat 69, Belgium;
© Copyright 2011 Elsevier B.V., All rights reserved.
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