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.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
