Public policies affecting firms fall broadly into two main categories: firm taxation on the one hand, and programs designed to support specific activities (innovation, exports) on the other hand. Policies supporting firms can take the form of financial aid (such as targeted loans or public guarantees) or tax credits targeted at certain activities (such as the Research Tax Credit). The important role of tax credits reflects the close links between business support policies and firm taxation.

Main themes. IPP researchers are interested in the economic justification of the various policies designed to support firm, the ability of such policies to achieve their stated objectives and evaluate their actual effects when implemented. They are also interested in the evolution of profit taxation and other elements of corporate taxation, including employer social security contributions and production taxes.

Methods. IPP researchers use several approaches to study how public policy affects firms. The analysis of schemes meant to support businesses consists in assessing their effects on individual or corporate behaviour and involves a wide range of ex-post evaluation methods. The analysis of corporate taxation is also based on micro-simulation methods applied to exhaustive corporate income tax returns data, making it possible to simulate the effects of alternative tax legislation in advance (ex-ante).

Programme director: Laurent Bach

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