Grantham Research Institute on
Climate Change and the Environment &
Centre for Economic Performance
London School of Economics
London WC2A 2AE
Institutional Affiliation: London School of Economics
Information about this author at RePEc
NBER Working Papers and Publications
|July 2016||Do tax Incentives for Research Increase Firm Innovation? An RD Design for R&D|
with Elias Einiö, Ralf Martin, Kieu-Trang Nguyen, John Van Reenen: w22405
We present evidence of a causal impact of research and development (R&D) tax incentives on innovation. We exploit a change in the asset-based size thresholds for eligibility for R&D tax subsidies and implement a Regression Discontinuity Design using administrative tax data on the population of UK firms. There are statistically and economically significant effects of the tax change on both R&D and patenting (even when quality-adjusted). R&D tax price elasticities are large at about 2.6, probably because the treated group is from a sub-population of smaller firms and subject to financial constraints. There does not appear to be pre-policy manipulation of assets around the thresholds that could undermine our design. Over the 2006-11 period aggregate business R&D would be around 10% lower in t...
|December 2012||Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry|
with Philippe Aghion, David Hemous, Ralf Martin, John Van Reenen: w18596
Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies.
Published: Philippe Aghion & Antoine Dechezlepr�tre & David H�mous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 000 - 000. citation courtesy of