Taxation and the International Mobility of Inventors
American Economic Review
vol. 106,
no. 10, October 2016
(pp. 2930-81)
(Complimentary)
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.Citation
Akcigit, Ufuk, Salomé Baslandze, and Stefanie Stantcheva. 2016. "Taxation and the International Mobility of Inventors." American Economic Review, 106 (10): 2930-81. DOI: 10.1257/aer.20150237Additional Materials
JEL Classification
- F22 International Migration
- F23 Multinational Firms; International Business
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H31 Fiscal Policies and Behavior of Economic Agents: Household
- J61 Geographic Labor Mobility; Immigrant Workers
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital