Evaluation of the Norwegian R&D Tax Credit Scheme

  • Ådne Cappelen
  • Erik Fjærli Statistics Norway
  • Torbjørn Hægeland Statistics Norway
  • Frank Foyn Statistics Norway
  • Jarle Møen Norwegian School of Economics and Business Administration
  • Arvid Raknerud Statistics Norway
  • Marina Rybalka Statistics Norway
Keywords: R&D tax credit, R&D subsidies, Innovation policy, Norway

Abstract

We find that the Norwegian R&D tax credit scheme introduced in 2002 mainly works as intended. The scheme is cost-effective and it is used by a large number of firms. It stimulates these firms to invest more in R&D, and, in particular, the effect is positive for small firms with little R&D experience. The returns on the R&D investments supported by the scheme are positive and generally not different from the returns to other R&D investments. We have found examples of what can be interpreted as tax motivated adjustments to the scheme, but to some extent this must be accepted as a cost to subsidy and support schemes intended for use by a large number of economic agents. This is particularly so when attempts are made to keep administrative expenditures and control routines at a low level.

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

Author Biographies

Ådne Cappelen

Senior Researcher, Research Department, Statistics Norway

Erik Fjærli, Statistics Norway

Researcher, Research Department, Statistics Norway

Torbjørn Hægeland, Statistics Norway

Director of Research

Research Department

Statistics Norway

Frank Foyn, Statistics Norway

Senior adviser

Department of Economic Statistics

Statistics Norway

Jarle Møen, Norwegian School of Economics and Business Administration

Professor

Department of Finance and Management Science

Norwegian School of Economics and Business Administration

Arvid Raknerud, Statistics Norway

Head of division

Research Department

Statistics Norway

 

Marina Rybalka, Statistics Norway

Junior Researcher

Research Department

Statistics Norway

References

ALSOS, G. A., Claussen, T., Ljunggren E., Madsen, E. L. (2007). Evaluering av SkatteFUNNs atferdsaddisjonalitet. I hvilken grad har SkatteFUNN ført til endret FoU-atferd i bedriftene? NF-rapport nr. 13/2007, Nordlandsforskning, Bodø.

BLOOM, N., Griffith, R., Van Reenen, J. (2002). Do R&D tax credits work? Evidence from a panel of countries 1979-1997, Journal of Public Economics, 85, 1-31.

CAPPELEN, Å., Fjærli, E., Foyn, F., Hægeland, T., Møen, J., Raknerud, A., Rybalka, M. (2008). Evaluering av SkatteFUNN - Sluttrapport, Rapporter 2008/2, Statistisk sentralbyrå, Oslo.

CAPPELEN, Å., Raknerud A., Rybalka M. (2007a). Resultater av SkatteFUNN - patentering og innovasjoner, Rapporter 2007/36 Statistisk sentralbyrå, Oslo.

CAPPELEN, Å., Raknerud, A., Rybalka, M. (2007b). Effekter av SkatteFUNN på foretakenes produktivitet og lønnsomhet, Rapporter 2007/22, Statistisk sentralbyrå, Oslo.

CAPPELEN, Å., Raknerud, A., Rybalka, M. (2007c). Effekter av SkatteFUNN på foretakenes produktivitet og lønnsomhet, Økonomiske analyser, 6/2007, 54-61.

DAVID, P. A., Hall, B. H., Toole, A. A. (2000). Is public R&D a complement or a substitute for private R&D? A review of econometric evidence. Research Policy, 29(4-5), 497-529.

FJÆRLI, E. (2007). Skattemotivert tilpasning til SkatteFUNN-ordningen, Rapporter 2007/50, Statistisk sentralbyrå, Oslo.

FOYN, F., Kjesbu, K. A. (2006). Brukernes vurdering av SkatteFUNN-ordningen, Rapporter 2006/7, Statistisk sentralbyrå, Oslo.

FOYN, F. Lien, G. (2007). Administrativ gjennomgang og brukervurdering av SkatteFUNN, Rapporter 2007/49, Statistisk sentralbyrå, Oslo.

GARCIA-QUEVEDO, J. (2004). Do Public Subsidies Complement Business R&D? A Meta-analysis of the Econometric Evidence. Kyklos, 57, 87-102.

GRILICHES, Z. (2000). R&D, Education and Productivity A Retrospective. Harvard University Press, Cambridge, Massachusetts.

HALL, B. (2002): The Financing of Research and Development. Oxford Review of Economic Policy, 18(1), 35-51.

HALL, B., Van Reenen, J. (2000). How Effective Are Fiscal Incentives for R&D? A Review of the Evidence. Research Policy, 29, 449-469.

HÆGELAND, T., Møen, J. (2007a). Input additionality in the Norwegian R&D tax credit scheme, Reports 2007/47, Statistics Norway.

HÆGELAND, T., Møen, J. (2007b). The relationship between the Norwegian R&D tax credit scheme and other innovation policy instruments, Reports 2007/45, Statistics Norway.

IENTILE D. Mairesse, J. (2009). A policy to boost R&D: Does the R&D tax credit work? EIB Papers 6/2009, European Investment Bank.

JAFFE, A. B (2002). Building programme evaluation into the design of public research-support programmes, Oxford Review of Economic Policy, 18, 22-34.

MOHNEN, P., Lokshin, B. (2009). What does it take for an R&D tax incentive policy to be effective?, UNU-MERIT Working Paper No. 2009-14.

MØEN, J. (2007). Should Finland Introduce an R&D tax credit? BETA Scandinavian Journal of Business Research, 2, 2007, 62-72.

OECD (2007). OECD Economic Surveys Norway, 2007/2.

WIESER, R. (2005). Research and Development Productivity and Spillovers: Empirical Evidence at the Firm Level, Journal of Economic Surveys, 19(4), 587-621.

Published
2010-11-04
How to Cite
Cappelen, Ådne, Fjærli, E., Hægeland, T., Foyn, F., Møen, J., Raknerud, A., & Rybalka, M. (2010). Evaluation of the Norwegian R&D Tax Credit Scheme. Journal of Technology Management & Innovation, 5(3), 96-109. https://doi.org/10.4067/S0718-27242010000300007
Section
Research Articles