What question did this study set out to answer?

This research aims to analyze the effectiveness of the research and experimentation tax credit on R&D activity across firms with varying q ratios from 1981 to 1985.

June 15, 2026Journal of the American Taxation Association

An Analysis of the Effectiveness of the Research and Experimentation Tax Credit in a q Model of Valuation.

View Full Paper

Ask AI

Bookmark

Authors

JTJanet W. Tillinger

Discussion

Member takes

Implication

Analysis reveals the R&D tax credit lacks cost-effectiveness across firm categories, indicating design improvements are needed.

Key Points

This research aims to analyze the effectiveness of the research and experimentation tax credit on R&D activity across firms with varying q ratios from 1981 to 1985.
Stratified sample of firms based on their q ratios to test the incentive effect of the R&D tax credit.
Utilized regression analysis to evaluate the relationship between q ratios and R&D investment.
Conducted a cost-benefit analysis to assess the credit's financial effectiveness across different firm categories.
Regression results align with expectations about the differential incentives provided by the credit.
Cost-benefit analysis shows the credit was not cost-effective for any group, particularly for firms with q greater than one.
The design of the OBRA'89 tax credit may lead to even lower effectiveness, with the current rate deemed too low for incentivizing firms.

Cite This Study

Janet W. Tillinger (1991) studied this question.

synapsesocial.com/papers/6a2f97c8a1cfeec490828c72 https://doi.org/10.2308/jata-6152096

View Full Paper

Ask AI

Bookmark

An Analysis of the Effectiveness of the Research and Experimentation Tax Credit in a q Model of Valuation.

Discussion

Member takes

Implication

Key Points

Cite This Study

An Analysis of the Effectiveness of the Research and Experimentation Tax Credit in a q Model of Valuation.

Discussion

Member takes

Implication

Key Points

Cite This Study

Also Consider

Also Consider