Cross-border effects of R&D tax incentives
- authored by
- Bodo Knoll, Nadine Riedel, Thomas Schwab, Maximilian Todtenhaupt, Johannes Voget
- Abstract
Existing evidence shows that R&D tax incentives boost countries’ private sector R&D. Given the importance of multinational enterprises (MNEs) for private sector innovation, it is unclear, however, whether firms engage in genuinely new R&D or whether R&D is reallocated across borders. Drawing on data on unconsolidated R&D activity of MNEs in Europe, we provide evidence that responses are dominated by cross-border relocations: More generous tax incentives in one country increase MNEs’ R&D investments in affiliates located there, while lowering R&D investments in affiliates of the same MNE group located in other countries. Globally, firms hardly raise their R&D activities when tax incentives become more generous.
- External Organisation(s)
-
Ruhr-Universität Bochum
University of Münster
Munich Society for the Promotion of Economic Research - CESifo GmbH
Ludwig-Maximilians-Universität München (LMU)
Norwegian School of Economics (NHH)
University of Mannheim
Centre for European Economic Research (ZEW)
- Type
- Article
- Journal
- Research policy
- Volume
- 50
- ISSN
- 0048-7333
- Publication date
- 11.2021
- Publication status
- Published
- Peer reviewed
- Yes
- ASJC Scopus subject areas
- Strategy and Management, Management Science and Operations Research, Management of Technology and Innovation
- Sustainable Development Goals
- SDG 9 - Industry, Innovation, and Infrastructure
- Electronic version(s)
-
https://doi.org/10.1016/j.respol.2021.104326 (Access:
Open)