The Intangible Economy

Radek Šauer

No 10/RT/26, Research Technical Papers from Central Bank of Ireland

Abstract: The paper explores how a small low-tax economy is affected by foreign corporatetax shocks. To address this question, I develop a dynamic general-equilibrium model, in which multinational firms engage in both tangible and intangible FDI. Intangible assets arise from multinationals’ R&D activities. Each multinational decides whether to place its intangibles in the parent firm or in an overseas affiliate. The placement decision shapes the intra-firm trade in royalties and R&D services. The model reveals that corporate taxes can directly impact arm’s-length prices of multinational firms. I investigate territorial corporate taxation as well as worldwide taxation of intangible income.

Keywords: intangible assets; multinational enterprises; corporate taxation; royalties; R&D services; endogenous markups. (search for similar items in EconPapers)
JEL-codes: E22 E62 F23 H25 (search for similar items in EconPapers)
Date: 2026-08
New Economics Papers: this item is included in nep-acc, nep-bec and nep-dge
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Working Paper: The Intangible Economy (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:cbi:wpaper:10/rt/26

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