Do R&amp;D tax credits work? Evidence from a panel of countries 1979–1997

Bloom, Nick; Griffith, Rachel; Reenen, John Van

doi:10.1016/s0047-2727(01)00086-x

Cited by 633 publications

(412 citation statements)

References 27 publications

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“…Hall and Van Reenen (2000) survey empirical studies that apply various methods and data sources and consequently produce very diverse results. A majority of the latest estimates is, however, broadly in line with a macro-panel study by Bloom et al (2002), who report that a 10% fall in the cost of R&D stimulates just over a 1% rise in the level of R&D in the short-run, but about a 10% rise over the long-run. In other words, fiscal incentives increase private expenditures on R&D by an amount that is equal to the loss in tax revenues.…”

Section: Raising Incentives To Investsupporting

confidence: 71%

The problem of private under-investment in innovation: A policy mind map

Peneder

2008

Technovation

100

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This paper reviews the major finance-related causes of private under-investment in innovation and the consequent alternative choices for public policy. The focus is on (i) incentive-based arguments that address the problem of limited appropriability of new knowledge, and (ii) the lacking access to external sources of finance caused by imperfections in the capital market. Drawing a policy mind map, which aims to enhance the mutual awareness and coordination of policy makers at the crossroads of technology and corporate finance, the paper is organised along the following chain of thought: (i) causes and rationales, (ii) aims and targets, (iii) critical constraints, and (iv) the main finance-related instruments of innovation policy. r

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Section: Raising Incentives To Investsupporting

confidence: 71%

The problem of private under-investment in innovation: A policy mind map

Peneder

2008

Technovation

100

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“…The first and most simple one is that it may be natural to expect that firms in low-tech sectors, which have on average a lower R&D intensity than companies in high-tech sectors, may find it relatively easier to in-7 In addition to these studies included in our MRA dataset, notice also that in their seminal paper Bloom and Van Reenen (2002) did also obtain user cost elasticities for all manufacturing industries in their sample. crease their R&D expenditures in response to a tax credit scheme.…”

Section: Mra Resultsmentioning

confidence: 99%

Do the effects of R&D tax credits vary across industries? A meta-regression analysis

2015

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This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms' innovation activities. We 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.JEL codes: O1, O3, O4

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“…These investments were stimulated by country policies to promote private R&D, such as R&D tax credits in the U.S. and similar incentives in Singapore and Taiwan. Such incentives have been the subject of considerable debate, as they may pay companies to do research they would have done anyway (Mohnen, 2012), but there is considerable evidence that they lead to greater private R&D activity (Bloom et al, 2002;Tyson and Linden, 2012). Whether this leads to more successful corporate innovation is not clear, but economists estimate the social return on investment of public funded R&D from a low of 30% to over 100%, and the social return far greater than the private return (Jones and Williams, 1998).…”

Section: Policy Implicationsmentioning

confidence: 99%

Who captures value from science-based innovation? The distribution of benefits from GMR in the hard disk drive industry

Dedrick

Kraemer

2015

Research Policy

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Hard disk drive industry a b s t r a c tWe analyze the discovery of giant magneto-resistance (GMR) and its development and commercialization by the global disk drive industry to answer the question of "Who captures the benefits from innovation in a global innovation system?" We assess the returns to the scientists, firms, and countries associated with GMR. We find that the French and German scientists that discovered GMR and their labs benefited by receiving the Nobel Prize and small licensing fees. The firm that first commercialized the technology, IBM, captured profits from selling hard disk drives and magnetic heads using GMR. Other hard disk drive and head manufacturers based in the U.S. and Japan were able to quickly assimilate the technology and catch up with IBM. France and Germany reaped limited returns due to the lack of domestic firms with the absorptive capacity to commercialize GMR. The U.S. and Japan benefited from the success of their firms in commercializing GMR, as did other countries which were part of the global value chains of those companies. Consumers and firms that incorporated hard drives in their products ultimately benefited from cheaper hard drives with greater capacity. These findings illustrate the importance of absorptive capacity at the firm and national level in capturing benefits from innovation. They also show that the benefits to first mover firms can be short-lived in a competitive industry with open transfer of knowledge and limited appropriability regimes. Finally, they show that the location of jobs and wages associated with innovative products depends on the structure of the global value chains of leading firms.

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Do R&D tax credits work? Evidence from a panel of countries 1979–1997

Cited by 633 publications

References 27 publications

The problem of private under-investment in innovation: A policy mind map

The problem of private under-investment in innovation: A policy mind map

Do the effects of R&D tax credits vary across industries? A meta-regression analysis

Who captures value from science-based innovation? The distribution of benefits from GMR in the hard disk drive industry

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