The R&D Tax Credit in France: Assessment and Ex-Ante Evaluation of the 2008 Reform
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.
This article is largely based on a report prepared for and supported by the French Ministry of Higher Education and Research (MESR). However, it does not express the official view of the MESR nor the French Government, and we are only responsible for our results and their interpretation. We have benefitted from helpful comments and suggestions from Steve Bond, Christine Greenhalgh, Bronwyn Hall, Benoit Masquin, Pierre Mohnen and Frédérique Sachwald, as well as from participants to the workshops where we presented this study. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Benoï¿½t Mulkay & Jacques Mairesse, 2013. "The R&D tax credit in France: assessment and ex ante evaluation of the 2008 reform," Oxford Economic Papers, Oxford University Press, vol. 65(3), pages 746-766, July. citation courtesy of