Current Projects
Profit Taxation, R&D Spending, and Innovation
(with Max Löffler, Ingo E. Isphording, Felix Pöge, Thu-Van Nguyen and Sebastian Siegloch)
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 firmcharacteristics, and for different types of research projects.
forthcoming, American Economic Journal: Economic Policy
[Draft]
(with Max Löffler, Ingo E. Isphording, Felix Pöge, Thu-Van Nguyen and Sebastian Siegloch)
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 firmcharacteristics, and for different types of research projects.
forthcoming, American Economic Journal: Economic Policy
[Draft]
Strategies and Consequences of Local Fiscal Consolidation: Evidence from Germany
(with Melinda Fremerey and Max Löffler)
This paper investigates the consequences of a large-scale fiscal consolidation policy in Germany that considerably tightened municipalities’ budget constraints. Identification relies on a difference-in-differences approach exploiting political discretion in the policy’s assignment rule. We uncover notable heterogeneity in local consolidation strategies by population size—likely due to varying agglomeration rents. Smaller municipalities predominately burdened residents via tax increases and cuts in services, whereas larger ones put part of the burden on firms. Smaller municipalities experienced sizable declines in population levels and house prices, as well as electoral backlash. We find no adverse effects of the policy on the local economy.
revise & resubmit, Journal of Urban Economics
[Draft]
(with Melinda Fremerey and Max Löffler)
This paper investigates the consequences of a large-scale fiscal consolidation policy in Germany that considerably tightened municipalities’ budget constraints. Identification relies on a difference-in-differences approach exploiting political discretion in the policy’s assignment rule. We uncover notable heterogeneity in local consolidation strategies by population size—likely due to varying agglomeration rents. Smaller municipalities predominately burdened residents via tax increases and cuts in services, whereas larger ones put part of the burden on firms. Smaller municipalities experienced sizable declines in population levels and house prices, as well as electoral backlash. We find no adverse effects of the policy on the local economy.
revise & resubmit, Journal of Urban Economics
[Draft]
Selected work in progress:
Selected work in progress:
Employment Effects of Corporate Taxation (with Sarah Gharbi, Emilie Sartre and Sebastian Siegloch)
The Societal Costs of Economic Decline (with Max Löffler) [funded by Deutsche Forschungsgemeinschaft, access to project's data sets: here]