Tax-Adjusted<i>q</i>Model with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives

Despite an extensive literature on the normative implications of different international tax regimes and an empirical literature addressing individual specific predictions, there exists little evidence encompassing the broad range of effects of taxing corporations' foreign-source income on a worldwide or territorial basis. This paper takes a more comprehensive quantitative approach by examining stock market reactions surrounding three events over the course of which Japan's 2009 adoption of a dividend exemption system was developed into proposed law. Using an event study methodology which leverages individual firm characteristics and accounts for contemporaneous financial market developments, we find that Japanese firms with less foreign exposure and fewer opportunities for tax avoidance experienced relatively larger abnormal returns, while differences in firms' foreign and domestic effective tax rates accounted for an aggregate capitalization effect of ¥4.1 trillion. We attribute these gains to a combination of enhanced opportunities for international expansion among smaller domestic firms, direct tax savings on official estimates of existing undistributed foreign earnings, and general cultural biases against tax planning in an environment of largely unchanged anti-abuse provisions.

show abstract

Investor valuations of Japan’s adoption of a territorial tax regime: quantifying the direct and competitive effects of international tax reform

Bradley

Dauchy

Hasegawa

2017

Int Tax Public Finance

View full text Add to dashboard Cite

show abstract

International Technology Sourcing and Knowledge Spillovers: Evidence from OECD Countries

Chen¹,

Dauchy²

2018

IMF Working Papers

Self Cite

View full text Add to dashboard Cite

How much do firms benefit from foreign R&D and through what channel? We construct a global network of corporate innovation using more than 1.5 million patents granted to firms in OECD countries. We test the "international technology sourcing" hypothesis that foreign innovation activities tap into foreign R&D and improve home productivity through knowledge spillovers. We find that firms with stronger inventor presence in technology frontier countries benefit disproportionately more from their R&D. The strength of knowledge spillovers depends on the direction of technology sourcing. Knowledge externality is larger for firms in technology frontier countries than for firms in non-frontier countries.

show abstract

scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.

Contact Info

hi@scite.ai

10624 S. Eastern Ave., Ste. A-614

Henderson, NV 89052, USA

Blog Terms and Conditions API Terms Privacy Policy Contact Cookie Preferences Do Not Sell or Share My Personal Information

Made with 💙 for researchers

Part of the Research Solutions Family.

Tax-AdjustedqModel with Intangible Assets: Theory and Evidence from Temporary Investment Tax Incentives

Cited by 2 publications

References 36 publications

Investor valuations of Japan’s adoption of a territorial tax regime: quantifying the direct and competitive effects of international tax reform

Investor valuations of Japan’s adoption of a territorial tax regime: quantifying the direct and competitive effects of international tax reform

International Technology Sourcing and Knowledge Spillovers: Evidence from OECD Countries

Contact Info

Product

Resources

About