Research

The value of a loss: The impact of restricting tax loss transfers. TRR 266 Accounting for Transparency Working Paper Series No. 128 (August 2023, Update May 2025); with E. Casi, B. Stage & J. Voget 

2nd round R&R in "Journal of Accounting Research"

We study the economic consequences of anti-loss trafficking rules, which disallow the use of loss carry-forwards as tax shield after a substantial ownership change. We use staggered changes to these rules in the EU27 Member States, Norway, and the United Kingdom from 1998 to 2019 and find that limiting the transfer of tax losses reduces the number of M&A by 18%. The impairment is driven by loss-making targets. Turning to the broader impact on industry dynamics, we find decreases in survival rates of young companies in response to tighter regulations. Some of these start-up deaths are compensated by new firm entrants. Loosening of regulation spurs firm entry and survival. Finally, tightening (loosening) anti-loss trafficking rules impairs (increases) industry productivity, especially for R&D-intensive industries that are more prone to loss-making in their life cycle. This is driven by anti-loss trafficking rules muting deal synergies and risk-taking. 

Too much "skin in the game" ruins the game: Evidence from managerial capital gains taxes. ZEW Discussion Paper No. 23-028 (July 2023, Update July 2025); with C. Yen

Under review in "Review of Financial Studies"

Co-investment, often seen as a remedy for agency problems, may incentivize managers to cater to own preferences. We provide evidence that mutual fund managers with considerable co-investment stakes alter risk-taking decisions to prioritize their own tax interests. By exploiting the enactment of the American Taxpayer Relief Act 2012 as an exogenous shock of managerial capital gains taxes, we observe that co-investing fund managers increase risk-taking by 8%. Specifically, these managers adjust their portfolios by investing in stocks with higher beta. The observed effect appears to be driven by agency incentives, particularly for funds with a more convex flow-performance relationship and for managers who have underperformed. Such tax-induced behavior is associated with negative fund performance. We highlight the role of co-investment in transmitting managerial tax shocks to mutual funds.

Tax Competition: Quo Vadis? Trends and Effects on Family Businesses. ZEW Discussion Paper No. 23-027 (July 2023, Update September 2025); with K. Nicolay, C. Spengel & S. Wickel 

Under review in "Intertax"

This study provides an overview of current political developments in tax competition, emphasizing the consequences for large family businesses. We analyse new tax competition trends in Europe and selected industrialized countries in recent years. Subsequently, we discuss various international tax policy counter-reactions, namely the EU Anti-Tax Avoidance Directive, country-by-country reporting and the OECD’s two-pillar project, with respect to their impact on tax competition. We outline a potential shift in tax competition away from companies towards highly wealthy and highly qualified individuals. The implications of these developments on large family businesses are exemplarily shown for Germany, a country with a large share of .family businesses

Do tax loss provisions distort venture capital funding of start-ups? ZEW Discussion Paper No. 21-008 (January 2021, Update November 2022)

I analyze whether anti-tax loss trafficking rules affect the funding of start-ups in Europe. I base my empirical analysis on a panel of VC-funded companies in the EU28 Member States from 1999 to 2014. These regulations disallow the use of loss carry-forwards after a substan-tial change in ownership or activity. This restriction could threaten accumulated loss carry-forwards of start-ups. Accounting for the increased risk and reduced return on their invest-ment, venture capital (VC) investors could reduce their funding. My findings suggest that strict anti-tax loss trafficking rules indeed impair VC funding. Especially companies in high-tech industries are affected.