Research

Publications

Withholding Taxes, Compliance Cost and Foreign Portfolio Investment (with M. Jacob), The Accounting Review, 2023, Vol 98 (2), pp. 299-327

Incumbency and expectations of fiscal rule compliance: Evidence from surveys of German policy makers (with F. Heinemann and E. Janeba), European Journal of Political Economy, 2022, Vol 72, 102093

Taxation and the External Wealth of Nations: Evidence from Bilateral Portfolio Holdings (with H. Huizinga, W. Wagner and J. Voget), Journal of International Money and Finance, 2022, Vol 122, 102548

Thinking Outside the Box: The Cross-border Effect of Tax Cuts on R&D (with T. Schwab), Journal of Public Economics, 2021, Vol 204, 104536

Additional Material: Online Appendix

Cross-Border Effects of R&D Tax Incentives (with B. Knoll, N. Riedel, T. Schwab, and J. Voget), Research Policy, 2021, Vol 50 (9), 104326

Mentioned by: Die Presse, Tax Foundation

International Taxation and Productivity Effects of M&As (with J. Voget), Journal of International Economics, 2021, Vol 131, 103438

Mentioned by: Joint Committee on Taxation (U.S. Congress), OECD ▪ Data access: Cross-border taxation

Capital Gains Taxation and Funding for Start-Ups (with A. Edwards), Journal of Financial Economics, 2020, Vol 138 (2), pp. 549-571

Mentioned by: Financial Post, Committee on Equality (Sweden)

Taxing Away M&A: Capital Gains Taxation and Acquisition Activity (with L. Feld, M. Ruf, U. Schreiber, and J. Voget), European Economic Review, 2020, Vol 128, 103505

Mentioned by: Tax Working Group (New Zealand) ▪ Data Access: Corporate capital gains tax data

Fiscal Competition and Public Debt (with E. Janeba), Journal of Public Economics, 2018, Vol 168, pp. 47-61

Working Papers

How Are Domestic Workers Affected by Foreign Tax Changes?

(joint with David Agrawal)

Paper, Data

We study the effect of foreign corporate tax cuts on domestic labor markets by linking the universe of Norwegian firm-level FDI data with personal tax returns and registries on individual education levels. Exploiting tax reforms in foreign countries with Norwegian subsidiaries, which lowered foreign tax rates by 3.1 percentage points, median wages in domestically-owned firms increase by 2.8%. This increase is driven by a composition effect whereby multinationals reduce the number of less-than-college educated workers, implying the share of college-educated workers increases by 2.1 percentage points. Multinationals substitute domestic and foreign labor so the parent company’s skill-distribution becomes more educated.

Altruistic Behavior and Government Interventions in Times of Crisis

(joint with Cornelius Schneider and Marina Schröder)

Paper

We analyze the response of charitable donations to restrictions on civil liberties. We argue that, theoretically, restrictions can both increase altruistic behavior by raising the perceived benefit of donations, and decrease it by imposing utility losses on the donor. Using data on donations in Norwegian grocery stores to estimate the effect empirically, we find that overall, donation rates increase significantly following the implementation of local restrictions. We provide evidence that this rise is likely driven by individuals not directly affected by the restrictions. Thus, the effect of government restrictions on altruistic behavior depends strongly on how these restrictions affect the donating individual and potential recipients.

Private Merger Negotiation Responses to Ongoing Tax Legislation

(joint with Alexander Edwards, Shane Heitzman, and Sandy Klasa)

Paper

Target valuation hinges on expected after-tax cash flows. But how do buyers and sellers adapt when future tax laws are uncertain or developing? Using hand-collected data, we examine the impact of tax policy developments on contemporaneous private merger negotiations surrounding U.S. corporate tax reform legislation in 2017. During the tax legislation period, bidders raise their offer prices relative to their initial bids when the target's expected gain from reform is high. The bidder's response to the target's gain from tax reform is concentrated in deals with competing bidders, when the target has a higher quality management team, or when the target's CEO is more involved in negotiations. When the target CEO is involved, the bidder's response to expected tax gains is strongest when the target CEO's incentives are more aligned with other shareholders. Individual bid increases in response to expected tax gains occur shortly after legislative events.

Business model digitalization, competition, and tax savings

(joint with Elisa Casi-Eberhard, Petro Lisowsky, and Barbara Stage)

Paper

We examine the effect of business model digitalization on competition and how corporate tax savings through digitalization may augment this relationship. Global policymakers express concern that digitalization-related tax savings unfairly benefit the competitive standing of rival firms over their competitors. Using textual analysis techniques to identify firms’ business models, we show that rivals’ adoption of a digital business model leads to negative economic effects on the performance of their non-digitalizing competitors. We estimate that a one standard deviation increase in the share of digitalized rivals in a market reduces a competitor’s market share by 4.6%. Suggesting significant tax savings from digitalizing, we also find that digitalizing rivals substantially reduce their effective tax rates, mostly by increased use of tax havens. However, when we test whether the detected competitive externalities vary depending on the share of digitalizing rivals with versus without substantial digitalization-related tax savings, we find the economic magnitudes of their effects are quantitatively similar. Therefore, contrary to policymakers’ concerns of digitalization-related tax savings unfairly shaping competition, our findings suggest that tax savings from digitalization is not a key driver of altering competition between digitalized and non-digitalized firms.

Work in Progress

The Elasticity of Taxable Income Across Countries (with N. Seegert, E. Patel, K. Bilicka and others)
Dividend Taxes and Consumption (with M. Jacob and R. Michaely)
Compliance costs of R&D tax credits (with N. Marienfeld)
Tax revenue effects of cum-fake transactions (with F. Zoutman, and D. Murphy)
Energy use of Norwegian house-holds and economic inequality (with C. Birkholz, Jarle Møen, and J. Voget)
Corporate Investment and the Use of Tax Information: Evidence from a Randomized Survey Experiment (with F. Buhlmann, A. Peichl, J. Voget and K. Wohlrabe)

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