Impact of the research tax credit (CIR) - Institute of Public Policies

Context

The research tax credit (CIR) is a form of government support that enables companies to benefit from tax relief when they increase their research and development expenditure. Introduced in 1983, the Research Tax Credit was significantly strengthened during the reforms of 2004 and 2008. It is currently the main source of public support for companies’ research and development (R&D) expenditure in France. Given the growing scale of expenditure and the importance of its effectiveness for the economy’s competitiveness and growth, it seems important to assess the impact of the CIR.

Presentation

The aim of this study is to carry out an ex post econometric evaluation of the successive reforms to the research tax credit in relation to the research, development and innovation activities of French firms.

Research Team

This project is led by the pole Firms.

Coordinator: Antoine Bozio

Antoine Bozio

Delphine Irac

Loriane Py

Sophie Cottet

Contact the coordinator

Method and Data

Randomized controlled trial

This project draws on company data from a range of sources (tax data, surveys on R&D expenditure, patent databases). Taking advantage of the specific rules governing the implementation of the CIR, various quasi-natural experiment methods will be employed to estimate the causal effect of the scheme.

Partners

The Banque de France is the IPP’s partner on this project. Within the Microeconomic and Structural Research Division of the Directorate-General for Research and International Relations, the Structural Policy Research Unit (SEPS) is tasked with analysing structural reforms in France and the euro area and their impact on long-term growth. The theoretical and quantitative studies carried out there make an active contribution to the Eurosystem’s deliberations, particularly regarding the impact of fiscal and regulatory policies. The SEPS economists involved in this project are Delphine Irac (Head of the Unit) and Loriane Py.