Cross-Country Evidence on the Preliminary Effects of Patent Box Regimes on Patent Activity and Ownership

32 Pages Posted: 27 Oct 2015

See all articles by Sebastien Bradley

Sebastien Bradley

Drexel University

Estelle P. Dauchy

Campaign for Tobacco Free Kids

Leslie A. Robinson

Dartmouth College - Tuck School of Business; Dartmouth College - Accounting

Date Written: October 15, 2015

Abstract

This paper evaluates the initial impacts of patent box regimes in light of their primary stated objectives: stimulating domestic innovation and retaining mobile patent income to limit base erosion. Despite their lack of nexus requirements, we find that patent box regimes yield a 3 percent increase in new patent applications for every percentage point reduction in the tax rate on patent income. We find no significant impact of these regimes on deterring outward cross-border attribution of patent ownership, or on attracting ownership of foreign inventions. Increased patenting activity hence appears focused on inventions involving co-located (domestic) patent owners and inventors.

Keywords: patent box, tax policy, innovation, base erosion

JEL Classification: K34, H25, H32

Suggested Citation

Bradley, Sebastien and Dauchy, Estelle P. and Robinson, Leslie, Cross-Country Evidence on the Preliminary Effects of Patent Box Regimes on Patent Activity and Ownership (October 15, 2015). Tuck School of Business Working Paper No. 2681433. Available at SSRN: https://ssrn.com/abstract=2681433 or http://dx.doi.org/10.2139/ssrn.2681433

Sebastien Bradley (Contact Author)

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Estelle P. Dauchy

Campaign for Tobacco Free Kids ( email )

1400 I Street NW
Suite 1200
Washington, DC New York 20005
United States
5857542532 (Phone)

Leslie Robinson

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Dartmouth College - Accounting ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-4018 (Phone)

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