Research

Publications

Private Merger Negotiations and Contemporaneous Tax Legislation (with A. Edwards, S. Heitzman, and S. Klasa), Contemporary Accounting Research, forthcoming

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

Dividend Taxes and Consumption

(joint with Martin Jacob and Roni Michaely)

Paper

Using detailed micro-level administrative data from Norway and a large dividend tax increase, we examine the direct effect of dividend taxation on shareholders’ consumption and saving and firms’ investment. We find that higher dividend taxes lead to a persistent decline in consumption of owners of private firms and listed firms. We also show that owners partially offset the consumption decline by reducing private savings. Firms increase retained earnings but do not expand productive investment. Instead, they accumulate financial assets, suggesting a reallocation of savings to the corporate level. Our findings highlight the consequences of dividend taxation on consumption and capital allocation.

The Elasticity of Corporate Taxable Income Across Countries

(joint with Nathan Seegerth, Katarzyna Bilicka, Elena Patel and others)

Paper, Website

Do firms respond similarly to corporate tax incentives across countries? We provide globally comparable estimates of the corporate elasticity of taxable income using administrative tax return data from sixteen countries and a unified empirical framework. Exploiting bunching at a common kink, zero taxable income, we estimate elasticities ranging from 0.08 to 1.9, with an average of 0.79. To explain this heterogeneity, we link elasticities to tax policy, firm characteristics, and country fundamentals. These differences imply that identical corporate tax reforms can generate sharply different revenue effects across countries, leading to substantial heterogeneity in the efficiency costs of corporate taxation.

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.

Charitable Giving and Government Interventions

(joint with Cornelius Schneider and Marina Schröder)

Paper

We study how government interventions during crises affect charitable giving. Using high-frequency field data from Norway’s deposit donation system, we link consumers’ real-world donation decisions at grocery store recycling machines to local Covid-19 restrictions. Exploiting decentralized policy variation across municipalities, we find that restrictions increase donation rates by 2.4%. We show that this effect reflects opposing mechanisms: increased perceived need raises giving, while constraints on donors reduce it. Consistent with this trade-off, effects vary by restriction type and proximity to beneficiaries. Our findings highlight how policy-induced changes in consumers’ environment shape prosocial behavior and how consumers adjust giving in response to perceived need and personal constraints.

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

Empirical evidence on household electricity price elasticities (with M. Holthe Hedne and I. Hovdahl)
Compliance costs of R&D tax credits (with N. Marienfeld and J. Sönsken, draft available upon request)
Cum-Fake: Improper Dividend-Tax Reclaims Through Pre-Release ADRs (with F. Zoutman, and D. Murphy, draft available upon request)
Behavioral responses to capital gains taxes on residential property sales (with C. Birkholz, Jarle Møen, and J. Voget, draft available upon request)
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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