Article in Journal

Taxation and Innovation: How R&D Tax Credit Schemes Foster Innovation in the Private Sector

Oliver Falck, Anna Kerkhof, Christian Pfaffl
CESifo, Munich, 2023

EconPol Forum 24 (4), 61-66
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  • Research and Development (R&D) is crucial to secure continued economic growth and prosperity
  • Private sector investments in R&D are typically too low, which constitutes a market failure
  • Governments use R&D tax credit schemes to compensate for this failure
  • Input-based tax credit schemes and lenient corporate taxation are especially useful to stimulate private sector R&D activities

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