Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/24085 
Year of Publication: 
2004
Series/Report no.: 
ZEW Discussion Papers No. 04-77
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
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 increase the R&D engagement at the firm level and that the R&D activities induced by fiscal incentives lead to additional innovation output.
Subjects: 
R&D
Innovation
Public Subsidies
Tax Credit
Policy Evaluation
JEL: 
O38
C25
H50
C14
Document Type: 
Working Paper

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