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Trends in UK BERD after the Introduction of R&D Tax Credits

Author

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  • Steve R. Bond

    (Nuffield College, Department of Economics and Centre for Business Taxation, University of Oxford, UK, and Institute for Fiscal Studies.)

  • Irem Guceri

    (St Peter?s College, Department of Economics and Centre for Business Taxation, University of Oxford)

Abstract

This paper documents the increase in R&D intensity in the UK manufacturing sector in the period following the introduction of R&D tax credits in 2000-02. This increase is broadly in line with that predicted by econometric studies of the impact of R&D tax credits, notably Bloom, Griffith and Van Reenen (2002). If anything, UK manufacturing R&D intensity has risen faster than their model predicts. The timing of this increase is not simply explained by trends in neighbouring economies, although one puzzle is that the increase is largely confined to high tech sub-sectors of manufacturing.

Suggested Citation

  • Steve R. Bond & Irem Guceri, 2012. "Trends in UK BERD after the Introduction of R&D Tax Credits," Working Papers 1201, Oxford University Centre for Business Taxation.
    • Handle: RePEc:btx:wpaper:1201
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    File URL: http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/WP1201.pdf
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    References listed on IDEAS

    as
    1. Bloom, Nick & Griffith, Rachel & Van Reenen, John, 2002. "Do R&D tax credits work? Evidence from a panel of countries 1979-1997," Journal of Public Economics, Elsevier, vol. 85(1), pages 1-31, July.
    2. Van Reenen, John, 1997. "Why has Britain had slower R&D growth?," Research Policy, Elsevier, vol. 26(4-5), pages 493-507, December.
    3. Jacques Mairesse & Benoît Mulkay, 2011. "Evaluation de l'Impact du Crédit Impot Recherche," Working Papers 2011-35, Center for Research in Economics and Statistics.
    4. Gavin Cameron, 1996. "On the measurement of real R&D: Divisia price indices for UK business enterprise R&D," Research Evaluation, Oxford University Press, vol. 6(3), pages 215-219, December.
    5. Ientile, Damien & Mairesse, Jacques, 2009. "A policy to boost R&D: Does the R&D tax credit work?," EIB Papers 6/2009, European Investment Bank, Economics Department.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Antoine Dechezlepretre & Elias Einio & Ralf Martin & Kieu-Trang Nguyen & John Van Reenen, 2016. "Do tax incentives for research increase firm innovation? An RD design for R&D," GRI Working Papers 230, Grantham Research Institute on Climate Change and the Environment.
    2. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
    3. Nicholas Crafts, 2013. "Returning to Growth: Policy Lessons from History," Fiscal Studies, Institute for Fiscal Studies, vol. 34(2), pages 255-282, June.
    4. Knoll, Bodo & Baumann, Martina & Riedel, Nadine, 2014. "The Global Effects of R&D Tax Incentives: Evidence from Micro-Data," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100347, Verein für Socialpolitik / German Economic Association.
    5. Isabel Busom & Beatriz Corchuelo & Ester Martínez-Ros, 2017. "Participation inertia in R&D tax incentive and subsidy programs," Small Business Economics, Springer, vol. 48(1), pages 153-177, January.
    6. Paulo G. Correa & Irem Guceri, 2013. "Tax Incentives for Research and Development," World Bank Publications - Reports 23659, The World Bank Group.
    7. Irem Guceri, 2018. "Will the real R&D employees please stand up? Effects of tax breaks on firm-level outcomes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(1), pages 1-63, February.
    8. Irem Guceri, 2015. "Tax incentives and R&D: an evaluation of the 2002 UK reform using micro data," Working Papers 1511, Oxford University Centre for Business Taxation.
    9. Dechezlepretre, Antoine & Einiö, Elias & Martin, Ralf & Nguyen, Kieu-Trang & Reenen, John Van, 2016. "Do tax incentives for research increase firm innovation? An RD design for R&D, patents and spillovers," LSE Research Online Documents on Economics 66428, London School of Economics and Political Science, LSE Library.
    10. Irem Guceri, 2016. "Will the real R&D employees please stand up? Effects of tax breaks on firm level outcomes," Working Papers 1602, Oxford University Centre for Business Taxation.
    11. Brown, James R. & Martinsson, Gustav & Petersen, Bruce C., 2017. "What promotes R&D? Comparative evidence from around the world," Research Policy, Elsevier, vol. 46(2), pages 447-462.

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    More about this item

    Keywords

    R&D; tax credits;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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