Title: R&D tax credits and their macroeconomic impact in the EU: an assessment using QUEST III
Publisher: Publications Office of the European Union
Publication Year: 2017
JRC N°: JRC108931
ISBN: 978-92-79-75763-1
ISSN: 1831-9424
Other Identifiers: EUR 28858 EN
OP KJ-NA-28858-EN-N
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC108931
DOI: 10.2760/6922
Type: EUR - Scientific and Technical Research Reports
Abstract: R&D tax credits are currently used by 25 Member States as a means to stimulate R&D investment and, ultimately, economic growth and employment. This paper is a first attempt to provide an in-depth analysis of the structural economic factors that, other things equal, affect or condition the potential macroeconomic impacts of expanding (or start implementing) R&D tax credit schemes. The analysis is based on the European Commission's QUEST III semi-endogenous growth model. Our main conclusion is that, while the short and medium-term impacts of increased R&D tax credits on Member States' GDP and other macroeconomic aggregates are overall significantly positive, there remains space to substantially improve the cost-effectiveness of these policies.
JRC Directorate:Growth and Innovation

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