Les firmes canadiennes répondent-elles aux incitations fiscales à la recherche-développement?

Dagenais, M.G.; Mohnen, Pierre; Therrien, Pierre

doi:10.7202/011385ar

Cited by 31 publications

(14 citation statements)

References 20 publications

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“…The estimated short-run elasticities are in line with those estimated by Bernstein (1986), 0.13, andDagenais et al (2004), 0.07, for Canada. The long-run elasticities are larger in in those studies (0.30 and 1.09, respectively) because of a faster estimated adjustment speed.…”

Section: Resultssupporting

confidence: 75%

“…For a survey of the empirical literature on R&D tax incentives, see Hall and van Reenen (2000) and Mohnen (2000). For previous work on Canadian firms, see Bernstein (1986), Lebeau (1996), Department of Finance Canada and Revenue (1997), Dagenais et al (2004), Czarnitzki et al (2004) and Parsons and Phillips (2007).…”

mentioning

confidence: 99%

“…We rely on a modeling of factor demand similar to the ones adopted in studies that have opted for an estimation of a factor demand model for R&D with R&D tax parameters included in the user cost of R&D (as in Bloom et al (2002), Mairesse and Mulkay (2004), Dagenais et al (2004) and Haegeland and Moen (2007)). We construct an observational specific B-index that enters the user cost of capital and that reflects the various changes over time and across firms in the R&D tax credit scheme in Quebec and in Canada.…”

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confidence: 99%

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Effectiveness of R&D tax incentives in small and large enterprises in Québec

Baghana¹,

Mohnen

2009

Small Bus Econ

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In this paper we evaluate the effectiveness of R&D tax incentives in Quebec, using manufacturing firm data from 1997 to 2003 originating from R&D surveys, annual surveys of manufactures and administrative data. The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with slightly higher elasticities for small firms than for large firms. We show that there is a deadweight loss associated with level-based R&D tax incentives that is particularly acute for large firms. For small firms it is not sizeable enough to suppress the R&D additionality, at least not for quite a number of years after the initial tax change. Incremental R&D tax credits do not suffer from this deadweight loss and are from that perspective preferable to level-based tax incentives.Keywords Price elasticity of R&D Á Quebec Á R&D tax credits JEL Classifications O32 Á O38 Á H25 Á H50 Á C23 Á L26

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Section: Resultssupporting

confidence: 75%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Effectiveness of R&D tax incentives in small and large enterprises in Québec

Baghana¹,

Mohnen

2009

Small Bus Econ

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“…In other words, the B-index indicates the marginal income before taxes needed for the marginal R&D investment to break even. This method has been used by Hall (1993), Bloom, Griffith and van Reenen (2002), Dagenais, Mohnen and Therrien (2004), Mairesse and Mulkay (2004), Wilson (2005), and Baghana and Mohnen (2009). (Czarnitzki, Hanel and Rosa, 2004;Duguet, 2007).…”

Section: The Notion Of Additionalitymentioning

confidence: 99%

“…Costs and benefits may be spread out over time because of adjustment costs in R&D, delays in getting the R&D tax credits, or inter-temporal connections between tax credits as in the case of incremental R&D tax credits. This type of reasoning has been applied in Dagenais, Mohnen, Therrien (2004) and Lokshin and Mohnen (2007b).…”

Section: Sensitivity Analysismentioning

confidence: 99%

What Does It Take for an R&D Tax Incentive Policy to Be Effective?

Mohnen¹,

Lokshin

2010

Reforming Rules and Regulations

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While in 1996, 12 OECD countries offered R&D tax incentives, in 2008 this number increased to 21. Most countries have opted for level-based instead of incremental R&D tax incentives. This paper takes a critical look at how the effectiveness of R&D tax incentives has been assessed in recent evaluations. Whether based on structural models estimating a price elasticity of R&D or on treatment evaluation methods, most studies estimate the cost effectiveness ratio or additionality. If the cost effectiveness ratio is greater than 1, or firms to more R&D than before, the policy is considered to be effective. A more proper net welfare evaluation of this policy should also include administration, compliance and transfer costs, the marginal burden of taxation, as well R&D externalities and the indirect effects on innovation and productivity.The net welfare gain is shown to be sensitive to a certain number of parameters that are not always estimated with great precision. In particular, the transfer cost or deadweight loss associated with level-based tax incentives is shown to depend on the size of the firm, or more precisely its ex-ante R&D level. We report on the success of a past policy changes in the Netherlands and simulate the effect of various parameter changes in the existing Dutch R&D tax incentive scheme. We show that introducing marginal changes in the schemes's parameters has little impact of increased R&D spending. The policy is more effective for small firms than for large firms. We end with a discussion of the pros and cons of level-based versus incremental R&D tax incentives.

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Innovation Systems, Policy and Management

2018

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Les firmes canadiennes répondent-elles aux incitations fiscales à la recherche-développement?

Cited by 31 publications

References 20 publications

Effectiveness of R&D tax incentives in small and large enterprises in Québec

Effectiveness of R&D tax incentives in small and large enterprises in Québec

What Does It Take for an R&D Tax Incentive Policy to Be Effective?

Innovation Systems, Policy and Management

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