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Suppelemental_Material for Corporate Taxes, Patent Shifting, and Anti-avoidance Rules: Empirical Evidence by Martina Baumann, Tobias Boehm, Bodo Knoll and Nadine Riedel in Public Finance Review

We empirically assess international corporate tax avoidance by strategic location of innovative output. The analysis draws on the universe of patent applications to the European Patent Office linked with data on multinational entities (MNEs) in Europe. Four findings emerge: Firstly, patent holdings are distorted towards low-tax countries. Secondly, patent location in low-tax countries is correlated with a geographic separation of R&D output and input. Thirdly, MNEs systematically sort high-value (low-value) patents to low-tax (high-tax) countries. Fourthly, the propensity to locate patent ownership in low-tax countries is significantly decreased if controlled foreign company rules are enacted in the MNE’s parent country. The tightening of transfer pricing legislations, in turn, exerts a weak negative effect on the location of patent ownership only.

Which impact does government size have on life satisfaction, and how do effects of bigger government differ between income groups in society? Previous studies typically employed country averages and thus neglect possibly heterogeneous happiness effects between income groups. The paper addresses empirically the effects of government spending on subjective well-being of individuals belonging to different income groups. Our analysis is based on individual data from 25 European countries participating in the European Social Survey. In contrast to most previous studies we take account of the endogeneity between relative income position and reported life satisfaction by an instrumental variable approach. Our results suggest, first, that most government spending categories, including social protection, are on average negatively related to individual well-being. Secondly, estimated marginal effects of health, education and social protection spending at different income levels show that spending increases always have a stronger negative effect on high income groups' well-being than on low income groups' life satisfaction. For all government spending categories, marginal happiness effects of higher public spending are clearly negative for income groups at the top.

Recent years have seen an unprecedented increase in the provision of R&D tax incentives. A growing empirical literature suggests that R&D tax incentives are instrumental in raising domestic R&D activity. In policy debates this fi nding is often interpreted to lend support to the notion that R&D tax incentives increase national welfare by internalizing knowledge spillovers to other agents in the economy and raising ineffi ciently low R&D levels. Our paper stresses that much of the observed increase in R&D activities in response to R&D tax incentives is in fact related to R&D activities that are attracted from abroad. Using unique panel data on R&D activities of European multinational fi rms, we test for a potential impact of both, R&D tax incentives in the affi liate's host country and R&D tax incentives at other locations of the multinational group. In line with theoretical predictions, we fi nd a positive impact of domestic R&D subsidies and a negative one for foreign subsidies provided at other group locations. Quantitatively, the fi ndings suggest that around 80% of the observed increase in R&D activities is related to relocations of R&D across country borders.

The purpose of this paper is to assess intergenerational occupational mobility in Germany. Using data from the Socioeconomic Panel (SOEP), we find a high persistence of occupational choices across fathers and children. To separate effects related to parental advice and influence (nurture) from genetic factors (nature), we determine the persistence separately for children who grew up with their biological fathers and those who did not. The results suggest that nurture-related effects explain a significant fraction of the observed correlation of fathers' and children's occupational choices. We discuss policy implications that follow from the analysis.

Are people happier if they experience freedom from regulation, and how do individual attitudes towards liberalisation influence personal life satisfaction? Based on data from European and World Values Surveys and the Economic Freedom of the World project we find evidence for positive effects of low regulation and pro-market attitudes on life satisfaction. Paradoxically, people who are opposed to market oriented policies sometimes benefit most from deregulation.

Die Diskussion um die Verlagerung von zusätzlichen Kompetenzen von den Nationalstaaten auf die europäische Ebene hat die Geschichte Europas seit dem Abschluss der Römischen Verträge begleitet. Dies betrifft gleichermaßen Entscheidungen über Aufgaben-, Ausgaben- und Einnahmekompetenzen. Die systematische Stärkung von EU-Organen ist dabei, anders als oft in den Medien suggeriert, keineswegs nur positiv zu bewerten; so wird die EU von Wissenschaftlern immer wieder als ein Leviathan skizziert. Konkret wird der EU vorgeworfen, sie habe ihre Kompetenzen an den Präferenzen der Bürger wie der Mitgliedstaaten vorbei erweitert (vgl. beispielsweise Vaubel, 2001, 2009a; Voigt, 2003a). Dies resultiere in einer aus wohlfahrtsökonomischer Perspektive ineffizienten Aufgabenverteilung zwischen den staatlichen Ebenen in Europa (vgl. beispielsweise Caesar, 2004, S. 155ff.). Daher bedarf es auf europäischer Ebene konstitutioneller Beschränkungen, um den EU-Leviathan zu zähmen. Die konstitutionenökonomische Analyse kann als eine ?Ordnungsökonomik der staatlichen Entscheidungsstrukturen? dazu beitragen, die allgemeinen Regeln des gesellschaftlichen Zusammenlebens zu verbessern. Ein Regelrahmen, der die abweichenden Zielvorstellungen der europäischen Organe berücksichtigt, ist konstitutionell effizient, sofern er wirksam die Bürger vor einer Ausbeutung durch den EU-Leviathan schützt. Da der Handlungsspielraum der EU Entscheidungen über Aufgaben, Ausgaben und Einnahmen umfasst, muss eine konstitutionenökonomische Analyse der geeigneten Verfassungsregeln alle drei Kompetenzbereiche berücksichtigen. Hieraus leitet sich die zentrale Frage dieses Beitrags ab: Welche bereits bestehenden oder noch zu schaffenden Restriktionen können verhindern, dass die EU ihre Kompetenzen in einem Ausmaß erweitert, das nicht mehr mit den Präferenzen der Bürger vereinbar ist? Für diesen Zweck kommen sowohl verfahrens- als auch ergebnisorientierte Maßnahmen in Frage. Da ergebnis-orientierte Grenzen staatlichen Handelns häufig willkürlich bestimmt sind und nur unzurei-chend den ständigen Veränderungen der gesellschaftlichen, wirtschaftlichen und sozialen Umweltbedingungen gerecht werden, setzt sich dieser Beitrag nur mit den Vorschlägen auseinander, die durch Wahl geeigneter Verfahren eine legitime und konstitutionell effiziente Weiterentwicklung der EU gewährleisten sollen. The uncontrolled centralization of competences on the European level is problematic insofar as it does not correspond to the citizens' preferences. Constitutional constraints can prove essential for the freedom and the welfare of EU citizens. Existing constraints like the subsidiarity principle, the Council's qualified-majority voting threshold, the checks and balances between different institutions, and the constitutional courts are not sufficient. Sunset competences, opting-out rights of the Member States, and the introduction of ?Functional, Overlapping, and Competing Jurisdictions? could strengthen institutional competition within the EU in order to shape the Union's and Member States' policies more according to citizens' preferences.

Uzun zamandır, siyasetçi ve bilim insanlarının temel ekonomik ilgi alanları, politika üretim süreci için büyüme ve gelir göstergelerine odaklanarak bir kılavuz sunmak olmuştur. Hayat memnuniyeti gibi temel faktörlere dair mevcut bilginin görece kıtlığı nedeniyle bu durum doğal bir başlangıç noktası olmuş ve ülkelerdeki hayat standartı farklılıklarından doğan belirli sorular bu meseleyi şekillendiren temel etken olmuştur: Hızlı ve yavaş büyüyen ülkelerin hangi önemli özellikleri fark yaratmaktadır? Neden düşük sermaye birikimi olan bazı ülkeler daha iyi başlama koşullarına sahipken diğer ülkelere göre daha iyi büyüme rakamları elde etmişlerdir? Bu sorulara verilebilecek cevap, son dönemdeki bazı araştırmaların da gösterdiği gibi kurumların genel niteliğinin uzun dönem büyüme ve ekonomik gelişmenin temel önemli faktörlerinden biri olmasıdır. Özellikle, ekonomik özgürlük ve piyasaların serbestleşmesinin büyüme ve gelire ilişkin pozitif bir etki yarattığına yönelik güçlü veriler mevcuttur