Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/118285
Title: Spillover from the haven: cross-border externalities of patent box regimes within multinational firms
Author: Schwab, Thomas
Todtenhaupt, Maximilian
Keywords: Patents d'invenció
Contractes internacionals de llicències
Impostos
Recerca industrial
Patents
Foreign licensing agreements
Taxation
Industrial research
Issue Date: 2017
Publisher: Institut d’Economia de Barcelona
Series/Report no: [WP E-IEB17/15]
Abstract: In this paper, we analyze the cross-border effects of patent box regimes that reduce the tax rate on income from intellectual property. We argue that the tax cut in one location of a multinational enterprise may reduce the user cost of capital for the whole group if profit shifting is possible. This spillover effect of the foreign tax cut raises domestic R&D investment. We test this mechanism by combining information on patents, firm ownership and specific characteristics of patent box regimes. Empirical results from a micro-level analysis suggest that patent box regimes without a nexus requirement (patent havens) induce positive cross-border externalities on R&D activity within multinational groups. For firms with cross-border links, the implementation of a foreign patent haven increases domestic research activity by about 2.3% per implied tax rate differential. Furthermore, our findings suggest that patent boxes generate negative spillovers on average patent quality. This has important implications for international tax policy and the evaluation of patent box regimes.
Note: Reproducció del document publicat a: http://www.ieb.ub.edu/2012022157/ieb/ultimes-publicacions
It is part of: IEB Working Paper 2017/15
URI: https://hdl.handle.net/2445/118285
Appears in Collections:IEB (Institut d’Economia de Barcelona) – Working Papers

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