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STICERD Work in Progress Seminars

Evaluating the French R&D tax credit scheme

Nicholas Chanut (Department of Economics, LSE)

Friday 03 May 2019 13:00 - 14:00

Due to the onging coronavirus outbreak, many of our seminars and public events this year will continue as online seminars. Please check our website listings and Twitter feed @STICERD_LSE for updates.


About this event

Tax credits to firms conducting R&D is a widespread fiscal incentive in developed countries. Since its major overhaul in 2008, the French "Research Tax Credit" has become the most generous of such schemes among OECD countries. It targets 25,000 firms annually and costs the French government more than 6 billion euros - about the same as funding for its two major research agencies. This work in progress is a first step towards evaluating the impact of this reform both on the intensive and extensive margin. We combine several sources of administrative data to link tax credit recipients to their innovation and economic outcomes. To disentangle causal effect from self-selection, we present two instruments: variations in local knowledge of the tax credit as proxied by newly established accounting firms, and differential intensity of treatment driven by researchers wage bill.