publ-ohne-podpubl-ohne-podRiedel, NadineRichter, KatharinaErnst, Christof2024-04-082024-04-082013-02-252013https://hohpublica.uni-hohenheim.de/handle/123456789/5678This paper examines the impact of tax incentives on corporate research and development (R&D) activity. Traditionally, R&D tax incentives have been provided in the form of special tax allowances and tax credits. In recent years, several countries moreover reduced their income tax rates on R&D output. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We provide evidence that, beyond this quantity effect, corporate taxation also distorts the quality of R&D projects, i.e. their innovativeness and revenue potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income is instrumental in attracting innovative projects with a high earnings potential and innovation level. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. R&D tax credits and tax allowances are in turn not found to exert a statistically significant impact on project quality.enghttp://opus.uni-hohenheim.de/doku/lic_ubh.phpCorporate taxResearch and developmentMicro data330KörperschaftsteuerSteuerwirkungForschung und EntwicklungWorkingPaper379281856urn:nbn:de:bsz:100-opus-8199