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The effects of R&D tax credits on patenting and innovations

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  • Cappelen, Ådne
  • Raknerud, Arvid
  • Rybalka, Marina

Abstract

Norwegian business spending on R&D is low by OECD standards. To stimulate business R&D, in 2002 the Norwegian government introduced a tax-based incentive, SkatteFUNN. We analyze the effects of SkatteFUNN on the likelihood of innovating and patenting. Using a rich database for Norwegian firms, we find that projects receiving tax credits result in the development of new production processes and to some extent the development of new products for the firm. Firms that collaborate with other firms are more likely to be successful in their innovation activities. However, the scheme does not appear to contribute to innovations in the form of new products for the market or patenting.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 41 (2012)
Issue (Month): 2 ()
Pages: 334-345

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Handle: RePEc:eee:respol:v:41:y:2012:i:2:p:334-345

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Web page: http://www.elsevier.com/locate/respol

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Keywords: Tax credits; R&D; Patenting; Innovation; Self-selection;

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References

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Citations

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Cited by:
  1. Pierre Mohnen & Boris Lokshin, 2009. "What Does it Take for an R&D Tax Incentive Policy to Be Effective?," CIRANO Working Papers 2009s-11, CIRANO.
  2. Bye, Brita & Fæhn, Taran & Heggedal, Tom-Reiel, 2009. "Welfare and growth impacts of innovation policies in a small, open economy; an applied general equilibrium analysis," Economic Modelling, Elsevier, vol. 26(5), pages 1075-1088, September.
  3. Ådne Cappelen & Arvid Raknerud & Marina Rybalka, 2013. "Returns to public R&D grants and subsidies," Discussion Papers 740, Research Department of Statistics Norway.
  4. Baghana, Rufin & Mohnen, Pierre, 2009. "Effectiveness of R&D Tax Incentives in Small and Large Enterprises in Quebec," MERIT Working Papers 001, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. Hagedoorn, John & Wang, Ning, 2010. "Is there complementarity or substitutability between internal and external R&D strategies?," MERIT Working Papers 005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  6. Marit E. Klemetsen & Brita Bye & Arvid Raknerud, 2013. "Can non-market regulations spur innovations in environmental technologies? A study on firm level patenting," Discussion Papers 754, Research Department of Statistics Norway.
  7. Isabel Busom & Beatriz Corchuelo & Ester Martinez Ros, 2012. "Tax incentives and direct support for R&D: What do firms use and why?," Working Papers wpdea1212, Department of Applied Economics at Universitat Autonoma of Barcelona.

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