Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
. 2023 May 3:1-47.
doi: 10.1007/s13132-023-01326-5. Online ahead of print.

Effectiveness of R&D Tax Incentives in Turkey

Ekin Taş  1 , Erkan Erdil  1
Affiliations

Effectiveness of R&D Tax Incentives in Turkey

Ekin Taş et al. J Knowl Econ. .

Abstract

The aim of this study is to investigate the effectiveness of research and development (R&D) tax incentives in generating additional business R&D expenditures in Turkey by applying propensity score matching (PSM) to correct any selection bias and to estimate the average treatment effect on the treated (ATT). Since the empirical literature lacks measurement of the effectiveness of these incentives in Turkey and partially touches upon global cases, this study contributes to fill this gap in the literature. For this purpose, the hypothesis that "R&D tax incentives increase business sector R&D intensity (the ratio of firm's net R&D expenditures to total turnover)" is tested, and the effectiveness of R&D tax incentives is examined in the context of input additionality. The questions of whether R&D tax incentives are effective in increasing business sector R&D intensity and to what extent R&D tax incentives produce additional R&D intensity are answered. According to the results, R&D tax incentives have a positive effect on business sector R&D intensity. However, the additionality impact is limited since the R&D tax incentive multiplier is between 0 and 1.

Keywords: Additionality; Impact analysis; Propensity score matching; R&D tax incentive multiplier; R&D tax incentives.

PubMed Disclaimer

Figures

Fig. 1
Fig. 1
Direct funding and tax support for business R&D (2006 & 2018). Source: OECD R&D tax incentive database (http://oe.cd/rdtax); March 2021
Fig. 2
Fig. 2
Number of countries offering R&D tax incentives(Central government level) (2000–2020). Source: OECD, The OECD Report on the R&D tax incentives database (2020) (http://oe.cd/rdtax)
Fig. 3
Fig. 3
Tax incentives vs. direct funding for business sector R&D activities (2000–2018). Source: OECD R&D tax incentives Database; March 2021
Fig. 4
Fig. 4
OECD implied marginal R&D tax subsidy rates(Unweighted average) (2000–2020). Source: OECD R&D tax incentives database; May 2021 (http://oe.cd/rdtax)
Fig. 5
Fig. 5
Funding of business sector. Source: OECD database, May 2021
Fig. 6
Fig. 6
R&D tax incentives in Turkey. Source: OECD database, May 2021
Fig. 7
Fig. 7
Number of R&D tax relief beneficiaries (Countries with less than 8000 and more than 1000 beneficiaries per year on average) (2010–2018). Source: OECD, The OECD Report on the R&D tax incentives database (2020) (http://oe.cd/rdtax)
Fig. 8
Fig. 8
Number of R&D tax relief beneficiaries(Countries with more than 5000 beneficiaries). Source: OECD, The OECD Report on the R&D tax incentives database (2020) (http://oe.cd/rdtax)
Fig. 9
Fig. 9
Matching results
Fig. 10
Fig. 10
Kernel density estimates of propensity score distributions
Fig. 11
Fig. 11
Matching results (second model with financial conditions)
Fig. 12
Fig. 12
Kernel density estimates of propensity score distributions (second model with financial conditions)
See this image and copyright information in PMC

References

    1. Acemoglu, D. (2012). Introduction to economic growth. Journal of Economic Theory, 147(2), 545–550. 10.1016/j.jet.2012.01.023 - DOI
    1. Aerts, K., & Czarnitzki, D. (2004). Using innovation survey data to evaluate R&D policy: the case of Belgium (pp. 1–26). ZEW Discussion Papers(04-55).
    1. Akçomak, I. S. (2016). Bilim, Teknoloji ve Yenilik Politikalarının Kuramsal Çerçevesi. Science and Technology Policies Research Center-Tekpol Working Paper Series, 5, 1–19.
    1. Appelt, S., Bajgar, M., Criscuolo, C., & Galindo-Rueda, F. (2020). The effects of R&D tax incentives and their tole in the innovation policy mix. OECD Science, Technology and Industry Policy Papers.
    1. Appelt, S., Galindo-Rueda, F., & González Cabral, A. C. (2019). Measuring R&D tax support: findings from the New OECD R&D tax incentives database (pp. 27–49). OECD Science, Technology and Industry Working Papers. 10.1787/18151965

LinkOut - more resources