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| Title: | Multi-Jurisdictional Tax Incentives and the Location of Innovative Activities |
| Authors: | MacDonald, Christy |
| Keywords: | patents
tax incentives
multi-jurisdictional
innovative activities |
| Approved Date: | 25-Aug-2009 |
| Date Submitted: | 2009 |
| Abstract: | In this dissertation, I explore the effect of tax incentives on where U.S. multinationals decide to locate their innovative activities worldwide. Research and development (R&D) tax incentives offered by foreign countries and differences between U.S. and foreign tax rates provide opportunities that may influence where multinationals decide to locate their innovative activities. Using firm-level patenting data that identifies the country-specific location of innovations from 1986 to 2000, I examine the relation between innovative activities performed in a foreign country and these tax incentives using the Heckman (1979) two step estimation approach. I find evidence that the foreign percentage of innovative activities is associated with the attractiveness of foreign R&D tax incentives and with an increase in the effect of U.S. R&D allocation rules. In addition, the results suggest that firms in excess foreign tax credit positions decrease the amount of R&D activities in a foreign location with increased foreign tax rates, consistent with income shifting incentives. In contrast, I find that the firms in deficit foreign tax credit positions increase their foreign R&D activities with increasing foreign tax rates. This study is the first to examine and provide evidence of the influence of foreign R&D tax incentives and income shifting incentives on a U.S. multinational’s decision on where to locate R&D activities. |
| Program: | Accounting |
| Department: | School of Accountancy |
| Degree: | Doctor of Philosophy |
| URI: | http://hdl.handle.net/10012/4595 |
| Appears in Collections: | Faculty of Arts Theses and Dissertations
Electronic Theses and Dissertations (UW)
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