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

Thomas Schwab and Maximilian Todtenhaupt

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We analyze cross-border externalities of patent box regimes. Tax cuts in one location of a MNE reduce the user cost of capital for the whole group if they have no nexus requirement. This spillover effect of foreign tax cuts raises domestic R&D activity. The implementation of a patent box in an affiliate country of a MNE, increases domestic R&D by about 1% per implied tax rate differential. Furthermore, patent boxes generate negative spillovers on average patent quality.

JEL-codes: H23 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-acc, nep-cse, nep-ino and nep-ipr
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Spillover from the haven: Cross-border externalities of patent box regimes within multinational firms (2017)
Working Paper: Spillover from the haven: Cross-border externalities of patent box regimes within multinational firms (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168148

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