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The R&D tax credit in France: assessment and ex ante evaluation of the 2008 reform

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  • Beno�t Mulkay
  • Jacques Mairesse

Abstract

This article presents an econometric analysis of the direct effects of the R&D tax credit (RTC) on private R&D in France and proposes an ex ante evaluation of the major reform implemented in 2008. We first estimate an error correction model of a dynamic R&D demand function on a large panel data of R&D doing firms, obtaining a preferred estimate of -0.4 for the long run elasticity of the user cost of R&D capital. We then perform a micro-simulation of the effects of the 2008 RTC reform that shows that the implicit long run budget multiplier would be about 0.7. Copyright 2013 Oxford University Press 2013 All rights reserved, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 65 (2013)
Issue (Month): 3 (July)
Pages: 746-766

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Handle: RePEc:oup:oxecpp:v:65:y:2013:i:3:p:746-766

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  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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  3. Jacques Mairesse & Jordi Jaumandreu, 2005. "Panel-data Estimates of the Production Function and the Revenue Function: What Difference Does It Make?," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 107(4), pages 651-672, December.
  4. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers, Economics Group, Nuffield College, University of Oxford W14&104., Economics Group, Nuffield College, University of Oxford.
  5. Sevestre, P. & Trognon, A., 1985. "A note on autoregressive error components models," Journal of Econometrics, Elsevier, Elsevier, vol. 28(2), pages 231-245, May.
  6. Arellano, M, 1987. "Computing Robust Standard Errors for Within-Groups Estimators," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 49(4), pages 431-34, November.
  7. Chirinko, Robert S. & Fazzari, Steven M. & Meyer, Andrew P., 1999. "How responsive is business capital formation to its user cost?: An exploration with micro data," Journal of Public Economics, Elsevier, Elsevier, vol. 74(1), pages 53-80, October.
  8. Emmanuel Duguet, 2008. "L’effet du credit d’impôt recherche sur le financement privé de la recherche : une évaluation économétrique," Documents de recherche, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne 08-08, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  9. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, Elsevier, vol. 126(1), pages 25-51, May.
  10. Stephen Bond & Julie Ann Elston & Jacques Mairesse & Beno�t Mulkay, 2003. "Financial Factors and Investment in Belgium, France, Germany, and the United Kingdom: A Comparison Using Company Panel Data," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 85(1), pages 153-165, February.
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Cited by:
  1. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series, Department of Economics, Loughborough University 2013_09, Department of Economics, Loughborough University, revised Sep 2013.

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