ABSTRACT
R&D tax incentives are widely used to stimulate private R&D. We review their effectiveness using meta regression analysis. For comparability of results, the analysis has been limited to estimates of the elasticity between the user cost of R&D capital and private R&D expenditure. By the end of 2014, 16 studies had reported 86 estimates of this elasticity. We find evidence of strong publication bias. After correcting for this, we find that a reduction in the user cost of capital of ten percent raises R&D expenditure by 1.5 percent. Despite the relatively homogeneous set of studies, the heterogeneity among estimates is large, and cannot be fully explained in our analysis.
JEL Codes: H25, H32, O32, O38
