Data and Code for: Profit Taxation, R&D Spending, and Innovation

Principal Investigator(s):  View help for Principal Investigator(s) Andreas Lichter, Heinrich Heine University Düsseldorf; Max Löffler, Maastricht University; Ingo E. Isphording, IZA—Institute for Labor Economics; Thu-Van Nguyen, Stifterverband; Felix Poege, Bocconi University; Sebastian Siegloch, University of Cologne

Version:  View help for Version V1

Name File Type Size Last Modified
  RDCT 04/23/2024 05:23:AM
  SVPAT 04/23/2024 05:23:AM
  local 04/23/2024 05:24:AM
README.md text/x-web-markdown 62.7 KB 04/23/2024 05:40:AM
README.pdf application/pdf 493.5 KB 04/23/2024 05:47:AM
flowchart.png image/png 176.6 KB 04/23/2024 05:39:AM

Project Citation: 

Lichter, Andreas, Löffler, Max, Isphording, Ingo E., Nguyen, Thu-Van, Poege, Felix, and Siegloch, Sebastian. Data and Code for: Profit Taxation, R&D Spending, and Innovation. Nashville, TN: American Economic Association [publisher], 2025. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-01-07. https://doi.org/10.3886/E198350V1

Project Description

Summary:  View help for Summary
This archive contains the replication files for our paper “Profit Taxation, R&D Spending, and Innovation.”

Abstract. We study how profit taxes affect establishments’ R&D activities. Relying on detailed panel data of R&D-active firms in Germany over two decades, we exploit identifying variation induced by more than 10,000 municipal changes in the local business tax rate and federal tax reforms with locally varying effects. Using event study techniques, we find a sizable, negative effect of profit taxes on establishments’ total R&D spending and patents filed. Zooming into the innovation production process, we uncover substantial heterogeneity in the impact of profit taxation for various R&D input factors, among firm characteristics, and for different types of research projects.


Funding Sources:  View help for Funding Sources Deutsche Forschungsgemeinschaft (EXC 2126/1-390838866); ZEW Mannheim (SEEK)

Scope of Project

Subject Terms:  View help for Subject Terms business taxation; firms; R&D; innovation; patents
JEL Classification:  View help for JEL Classification
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H32 Fiscal Policies and Behavior of Economic Agents: Firm
      O31 Innovation and Invention: Processes and Incentives
      O32 Management of Technological Innovation and R&D
Geographic Coverage:  View help for Geographic Coverage Germany
Time Period(s):  View help for Time Period(s) 1995 – 2017
Universe:  View help for Universe R&D active firms in Germany
Data Type(s):  View help for Data Type(s) administrative records data; aggregate data; geographic information system (GIS) data; program source code; survey data

Methodology

Unit(s) of Observation:  View help for Unit(s) of Observation establishments
Geographic Unit:  View help for Geographic Unit municipality

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Published Versions

V1 [2025-01-07]

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