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Taxes and Innovation: How Tax Incentives for R&D Create Incentives for Innovation in Private Companies

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  • Oliver Falck
  • Anna Kerkhof
  • Christian Pfaffl
  • Jean-Victor Alipour

Abstract

The analysis of the existing literature on the effect of fiscal R&D support paints a predominantly positive picture with regard to the desired effectiveness. In particular, targeted, input-based tax incentives for R&D and general incentives through corporate taxes have a positive effect on innovation and R&D activities in private companies.

Suggested Citation

  • Oliver Falck & Anna Kerkhof & Christian Pfaffl & Jean-Victor Alipour, 2021. "Taxes and Innovation: How Tax Incentives for R&D Create Incentives for Innovation in Private Companies," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(10), pages 26-30, October.
    • Handle: RePEc:ces:ifosdt:v:74:y:2021:i:10:p:26-30
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    References listed on IDEAS

    as
    1. Shao, Yuchen & Xiao, Chengrui, 2019. "Corporate tax policy and heterogeneous firm innovation: Evidence from a developing country," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 470-486.
    2. Schwab, Thomas & Todtenhaupt, Maximilian, 2021. "Thinking outside the box: The cross-border effect of tax cuts on R&D," Journal of Public Economics, Elsevier, vol. 204(C).
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    Cited by:

    1. Gundert, Hannah & Nicolay, Katharina & Steinbrenner, Daniela & Wickel, Sophia, 2023. "The tax attractiveness of EU locations for corporate investments: A stocktaking of past developments and recent reforms," ZEW Discussion Papers 23-066, ZEW - Leibniz Centre for European Economic Research.

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