Journal of Business & Economic Policy

The Effect of R&D Tax Credits on Output Quality: Evidence from Firms in Chile
Hugo Vaca Pereira Rocha

Abstract
This paper studies the effect of the Research and Development (R&D) tax credits contemplated in the R&D Tax Incentive Law (Ley 20.241 ) on the quality of goods and services provided by companies in Chile. Exploiting survey data at the firm level, this paper employs three different ordered models to estimate the probability that firms with R&D tax credits declare improvements on goods and services provided. Results indicate no statistically significant effects on quality improvements for firms with the tax credits. In addition, results show that property rights have a positive and statistically significant effect on the probability of firms declaring high quality output improvements.

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