Patent boxes have been heavily debated for their role in corporate tax competition. This paper uses firm-level data for the period 2000–12 for the top 2,000 corporate research and development investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes and exploit a new and original dataset on patent box features such as the conditionality on performing research in the country or their coverage. We find that patent boxes have a considerable effect on attracting patents, mostly because of their favourable tax treatment. Patents with high earnings potential are particularly sensitive. Patent boxes with a large coverage also have stronger effects on the location of patents. We also analyse the impact of patent boxes and their tax advantages on local R&D activities and find that R&D development conditions tend to attenuate the dominant fiscal effect of patent boxes.

Alstadsæter, A., Barrios, S., Nicodeme, G., Skonieczna, A.M., Vezzani, A. (2018). Patent boxes design, patents location, and local R&D. ECONOMIC POLICY, 33(93), 131-177 [10.1093/epolic/eix021].

Patent boxes design, patents location, and local R&D

Vezzani, Antonio
2018-01-01

Abstract

Patent boxes have been heavily debated for their role in corporate tax competition. This paper uses firm-level data for the period 2000–12 for the top 2,000 corporate research and development investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes and exploit a new and original dataset on patent box features such as the conditionality on performing research in the country or their coverage. We find that patent boxes have a considerable effect on attracting patents, mostly because of their favourable tax treatment. Patents with high earnings potential are particularly sensitive. Patent boxes with a large coverage also have stronger effects on the location of patents. We also analyse the impact of patent boxes and their tax advantages on local R&D activities and find that R&D development conditions tend to attenuate the dominant fiscal effect of patent boxes.
2018
Alstadsæter, A., Barrios, S., Nicodeme, G., Skonieczna, A.M., Vezzani, A. (2018). Patent boxes design, patents location, and local R&D. ECONOMIC POLICY, 33(93), 131-177 [10.1093/epolic/eix021].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11590/355341
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