Details
| Original language | English |
|---|---|
| Article number | 104536 |
| Journal | Journal of public economics |
| Volume | 204 |
| Early online date | 5 Nov 2021 |
| Publication status | Published - Dec 2021 |
| Externally published | Yes |
Abstract
We analyze how a reduction of the tax rate on corporate income from intellectual property (IP) in one country, known as a patent box regime, affects corporate R&D activity in other countries. Combining data on patents and multinational corporation networks, we show that the cross-border effect of tax policy changes depends on whether co-location of the IP and the underlying R&D activity is required. Patent boxes without such a requirement increase patent output in other countries. Patent boxes with such a requirement reduce patent output abroad but only when relocation costs for R&D activity are small.
Keywords
- Cross-border, Innovation, Multinational corporations, Taxation
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Finance
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Journal of public economics, Vol. 204, 104536, 12.2021.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Thinking outside the box
T2 - The cross-border effect of tax cuts on R&D
AU - Schwab, Thomas
AU - Todtenhaupt, Maximilian
PY - 2021/12
Y1 - 2021/12
N2 - We analyze how a reduction of the tax rate on corporate income from intellectual property (IP) in one country, known as a patent box regime, affects corporate R&D activity in other countries. Combining data on patents and multinational corporation networks, we show that the cross-border effect of tax policy changes depends on whether co-location of the IP and the underlying R&D activity is required. Patent boxes without such a requirement increase patent output in other countries. Patent boxes with such a requirement reduce patent output abroad but only when relocation costs for R&D activity are small.
AB - We analyze how a reduction of the tax rate on corporate income from intellectual property (IP) in one country, known as a patent box regime, affects corporate R&D activity in other countries. Combining data on patents and multinational corporation networks, we show that the cross-border effect of tax policy changes depends on whether co-location of the IP and the underlying R&D activity is required. Patent boxes without such a requirement increase patent output in other countries. Patent boxes with such a requirement reduce patent output abroad but only when relocation costs for R&D activity are small.
KW - Cross-border
KW - Innovation
KW - Multinational corporations
KW - Taxation
UR - http://www.scopus.com/inward/record.url?scp=85118576124&partnerID=8YFLogxK
U2 - 10.1016/j.jpubeco.2021.104536
DO - 10.1016/j.jpubeco.2021.104536
M3 - Article
AN - SCOPUS:85118576124
VL - 204
JO - Journal of public economics
JF - Journal of public economics
SN - 0047-2727
M1 - 104536
ER -