Tax Policy and the Globalisation of R&D

Russell Thomson ()

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: This paper examines the factors influencing the globalisation of R&D, with a particular focus on the role of tax policy, using panel data for 25 OECD countries over the period 1980- 2005. Two measures of globalisation are considered - R&D directly financed from abroad and R&D expenditure by affiliates of US multinational enterprises (MNEs). The econometric analysis, which controls for other determinants of inter-country differences in R&D investment, finds no evidence that host country tax policy is an important determinant of MNE location decisions or in attracting cross-border contract R&D. There is evidence that affiliate fixed capital stock and total sales are strong determinants of R&D performed by affiliates of US MNEs. Controlling for these variables, host country attributes seemed to be less important. In the case of cross-border contract R&D, host country expenditure on R&D via institutions of higher education is also found to be important.

Keywords: Globalisation of R&D; tax policy; foreign direct investment; multinational enterprises (search for similar items in EconPapers)
JEL-codes: F21 O31 O32 O38 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2009-04
New Economics Papers: this item is included in nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Tax Policy and the Globalisation of R&D (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2009n11

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