Lichter, Andreas
[Author];
Löffler, Max
[Author];
Isphording, Ingo Eduard
[Author];
Nguyen, Thu-Van
[Author];
Poege, Felix
[Author];
Siegloch, Sebastian
[Author]
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Media type:
E-Book;
Report
Title:
Profit taxation, R&D spending, and innovation
Contributor:
Lichter, Andreas
[Author];
Löffler, Max
[Author];
Isphording, Ingo Eduard
[Author];
Nguyen, Thu-Van
[Author];
Poege, Felix
[Author];
Siegloch, Sebastian
[Author]
imprint:
Mannheim: ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, 2021
Footnote:
Diese Datenquelle enthält auch Bestandsnachweise, die nicht zu einem Volltext führen.
Description:
We study how profit taxation affects plants' R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987-2013 for identification. Applying event study models, we find a negative and statistically significant effect of an increase in profit taxation on plants' R&D spending with an implied long-run elasticity of 􀀀1.25. Reductions in R&D are particularly strong among more credit-constrained plants. In contrast, homogeneity of effects across the plant size distribution questions policy makers common practice to link targeted R&D tax incentives to plant size. We further find lagged negative effects on the (citation-weighted) number of filed patents.