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The Effects of R&D Tax Incentive Reform on R&D Expenditures: The Case of 2009 Reform in Japan

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  • OKAMURO, Hiroyuki
  • SAKUMA, Yohei

Abstract

Tax incentives have been implemented in several countries, including Japan, to promote research and development (R&D). Several previous studies evaluate the effects of R&D tax incentives on R&D expenditures, but few address the changes in its conditions. This study fills this gap by focusing on the tax incentive reform in Japan in 2009 and using a comprehensive panel data set of Japanese corporations (TDB COSMOS1). Using DID and fixed-effect panel analyses, we found a positive and significant effect of enhancing the deduction ratio ceiling but not extending the carryover period on R&D expenditures.

Suggested Citation

  • OKAMURO, Hiroyuki & SAKUMA, Yohei, 2021. "The Effects of R&D Tax Incentive Reform on R&D Expenditures: The Case of 2009 Reform in Japan," TDB-CAREE Discussion Paper Series E-2021-04, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    • Handle: RePEc:hit:tdbcdp:e-2021-04
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    More about this item

    Keywords

    R&D; tax incentive reform; policy evaluation; Japan;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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