Working Paper #2007-025
Measuring the Effectiveness of R&D tax credits in the Netherlands
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.
- Keywords
-
- R&D tax credits
- panel data
- crowding out
- user-cost elasticity
- JEL codes
-
- O32
- O38
- H25
- H50
- C23
- UNU-MERIT
- Working
- Papers
- ISSN
- 1871-9872
Cite this as
APA 7th ed.Lokshin, B., & Mohnen, P. (2007). Measuring the Effectiveness of R&D tax credits in the Netherlands (UNU-MERIT Working Paper No. 2007-025). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=2991