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The effect of patent boxes on foreign direct investment in Europe

Tingstedt, Karl LU (2020) NEKH01 20201
Department of Economics
Abstract
Since Patent Boxes’ first emergence in the 1970’s in Ireland their presence has been fiercely debated. Since their appearance they have grown in numbers and are now present in a multitude of countries across the world. From the perspective of countries and their respective government the reason to their implementation are the following:
(i) to incentivize investment in R&D, (ii) to attract (or retain) mobile investments associated with knowledge creation and high-skilled jobs and to (iii) raise revenue more efficiently on mobile income streams. For multinational corporations the reason as to why patent boxes are valued is more straightforward, as their existence allow for larger profits by lowering the tax burden imposed and thus enabling... (More)
Since Patent Boxes’ first emergence in the 1970’s in Ireland their presence has been fiercely debated. Since their appearance they have grown in numbers and are now present in a multitude of countries across the world. From the perspective of countries and their respective government the reason to their implementation are the following:
(i) to incentivize investment in R&D, (ii) to attract (or retain) mobile investments associated with knowledge creation and high-skilled jobs and to (iii) raise revenue more efficiently on mobile income streams. For multinational corporations the reason as to why patent boxes are valued is more straightforward, as their existence allow for larger profits by lowering the tax burden imposed and thus enabling larger net profits. This study examines the relationship between foreign direct investment inflow and patent boxes through time series regressions. The sample was divided into two groups, wealthy and not wealthy countries in order to capture fundamental differences among the subsets. The study confirms that patent boxes do have a positive significant effect on FDI, though only for the wealthy subset group. Why this result shows inconsistencies between the subsets is hard to determine and requires further examination. (Less)
Popular Abstract
Since Patent Boxes’ first emergence in the 1970’s in Ireland their presence has been fiercely debated. Since their appearance they have grown in numbers and are now present in a multitude of countries across the world. From the perspective of countries and their respective government the reason to their implementation are the following:
(i) to incentivize investment in R&D, (ii) to attract (or retain) mobile investments associated with knowledge creation and high-skilled jobs and to (iii) raise revenue more efficiently on mobile income streams. For multinational corporations the reason as to why patent boxes are valued is more straightforward, as their existence allow for larger profits by lowering the tax burden imposed and thus enabling... (More)
Since Patent Boxes’ first emergence in the 1970’s in Ireland their presence has been fiercely debated. Since their appearance they have grown in numbers and are now present in a multitude of countries across the world. From the perspective of countries and their respective government the reason to their implementation are the following:
(i) to incentivize investment in R&D, (ii) to attract (or retain) mobile investments associated with knowledge creation and high-skilled jobs and to (iii) raise revenue more efficiently on mobile income streams. For multinational corporations the reason as to why patent boxes are valued is more straightforward, as their existence allow for larger profits by lowering the tax burden imposed and thus enabling larger net profits. This study examines the relationship between foreign direct investment inflow and patent boxes through time series regressions. The sample was divided into two groups, wealthy and not wealthy countries in order to capture fundamental differences among the subsets. The study confirms that patent boxes do have a positive significant effect on FDI, though only for the wealthy subset group. Why this result shows inconsistencies between the subsets is hard to determine and requires further examination. (Less)
Please use this url to cite or link to this publication:
author
Tingstedt, Karl LU
supervisor
organization
course
NEKH01 20201
year
type
M2 - Bachelor Degree
subject
keywords
Patent Box, FDI, Foreign Direct Investment, Tax, Tax incentive, R&D
language
English
id
9030425
date added to LUP
2021-01-19 15:22:35
date last changed
2021-01-19 15:22:35
@misc{9030425,
  abstract     = {{Since Patent Boxes’ first emergence in the 1970’s in Ireland their presence has been fiercely debated. Since their appearance they have grown in numbers and are now present in a multitude of countries across the world. From the perspective of countries and their respective government the reason to their implementation are the following:
(i) to incentivize investment in R&D, (ii) to attract (or retain) mobile investments associated with knowledge creation and high-skilled jobs and to (iii) raise revenue more efficiently on mobile income streams. For multinational corporations the reason as to why patent boxes are valued is more straightforward, as their existence allow for larger profits by lowering the tax burden imposed and thus enabling larger net profits. This study examines the relationship between foreign direct investment inflow and patent boxes through time series regressions. The sample was divided into two groups, wealthy and not wealthy countries in order to capture fundamental differences among the subsets. The study confirms that patent boxes do have a positive significant effect on FDI, though only for the wealthy subset group. Why this result shows inconsistencies between the subsets is hard to determine and requires further examination.}},
  author       = {{Tingstedt, Karl}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The effect of patent boxes on foreign direct investment in Europe}},
  year         = {{2020}},
}