The Innovation tax credit (crédit d’impôt innovation, CII) is an extension of the Research tax
credit (crédit d’impôt recherche, CIR) intended to boost the incentive effect of the latter on
SMEs to encourage them to engage in the creation of new products via the development of
prototypes or pilot plants. Introduced in 2013, it amounted to €120 million of tax credit in
2014 for some 5,300 recipients. This article seeks to measure the impact of the introduction
of this scheme on its beneficiaries over the period from 2013 to 2016. Using a
difference‑in‑differences method following propensity score matching, we find a greater
increase in employment in the short term for firms benefiting from the scheme, along with
a more pronounced increase in their sales turnover in the medium term. A greater increase
in the number of new products produced by the beneficiaries is also observed. Finally, the
introduction of the CII went along with a reduction in the research expenditure reported
under the CIR.