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Spillover from the Haven: Cross-border Externalities of Patent Box Regimes within Multinational Firms

We analyze the cross-border effect of tax cuts on R&D activity in the context of profit shifting. A tax cut in one location of a multinational enterprise reduces the user cost of capital for the whole group if profit shifting is possible and exerts a positive cross-border effect on R&D output. Using micro-level data, we find an increase of patent output of 15% upon the implementation of a foreign tax cut for firms with cross-border links. In addition, we find that foreign tax cuts prohibiting profit shifting generate a negative cross-border effect on average patent quality. / Series: WU International Taxation Research Paper Series

Identiferoai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:5230
Date01 March 2018
CreatorsSchwab, Thomas, Todtenhaupt, Maximilian
PublisherWU Vienna University of Economics and Business, Universität Wien
Source SetsWirtschaftsuniversität Wien
LanguageEnglish
Detected LanguageEnglish
TypePaper, NonPeerReviewed
Formatapplication/pdf
Relationhttps://ssrn.com/abstract=2864304, http://epub.wu.ac.at/5230/

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