Taxation and the International Mobility of Inventors
Ufuk Akcigit, Salomé Baslandze, Stefanie Stantcheva
American Economic Review · 2016 · Volume 106 · Issue 10
Abstract
We study the effect of top tax rates on "superstar" inventors' international mobility since 1977, using panel data on inventors from the US and European Patent Offices. We exploit the differential impact of changes in top tax rates on inventors of different qualities. Superstar inventors' location choices are significantly affected by top tax rates. In our preferred specification, the elasticity to the net-of-tax rate of the number of domestic superstar inventors is around 0.03, while that of foreign superstar inventors is around 1. These elasticities are larger for inventors in multinational companies. An inventor is less sensitive to taxes in a country if his company performs a higher share of its research there.
Keywords
International Migration, Multinational Firms, International Business, Personal Income and Other Nonbusiness Taxes and Subsidies, includes inheritance and gift taxes, Fiscal Policies and Behavior of Economic Agents: Household, Geographic Labor Mobility, Immigrant Workers, Innovation and Invention: Processes and Incentives, Intellectual Property and Intellectual Capital
Enable JavaScript for citation tools and additional paper interactions.