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Taxation, R&D tax incentives and patent application in Europe

By Christof Ernst and Christoph Spengel

Abstract

The focus of this paper is on effects from tax incentives for research and development inputs (R&D) and corporate income tax on business R&D and patenting behaviour. First, we provide a theoretical discussion of tax planning with R&D and intellectual property (IP) ownership. Further, we employ firm-specific micro-data on patent applications of European corporations at the European Patent Office to test reactions on changes in R&D tax incentives and corporate tax burden. We find a positive impact of R&D tax incentives and a negative impact of the statutory corporate income tax rate on patenting. R&D incentives rather influence the tendency to invest in R&D, whereas the tax burden rather influences the scale of R&D investment and the count of patent applications

Topics: 330 Wirtschaft
Year: 2011
OAI identifier: oai:ub-madoc.bib.uni-mannheim.de:3169

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