Intellectual property accounts for a growing share of firms’ assets. It is more mobile than other forms of capital, and could be used by firms to shift income offshore and to reduce their corporate income tax liability. We consider how influential corporate income taxes are in determining where firms choose to legally own intellectual property. We estimate a mixed (or random coefficients) logit model that incorporates important observed and unobserved heterogeneity in firms’ location choices. We obtain estimates of the full set of location specific tax elasticities and conduct ex ante analysis of how the location of ownership of intellectual property will respond to changes in tax policy. We find that recent reforms that give preferential tax treatment to income arising from patents are likely to have significant effects on the location of ownership of new intellectual property, and could lead to substantial reductions in tax revenue.
![](/sites/default/files/styles/wysiwyg_full_width_desktop/public/uploads/images/graphs/griffithetal_jpube.jpg?itok=AtSBtZy1)
Authors
![Rachel Cassidy](/sites/default/files/styles/square_desktop/public/2022-08/Rachel_Griffith.jpg?itok=YovGgLq9)
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
![Helen Miller](/sites/default/files/styles/square_desktop/public/2022-07/Helen-Miller.jpg?itok=nATifWPA)
![Martin O'Connell](/sites/default/files/styles/square_desktop/public/2022-07/Martin%20O%27Connell.jpg?itok=MwAa7oSf)
Research Fellow University of Wisconsin
Martin, previously Deputy Research Director, is a Research Fellow at IFS and Professor of Economics at the University of Wisconsin.
Journal article details
- DOI
- 10.1016/j.jpubeco.2014.01.009
- Publisher
- Elsevier
- Issue
- Volume 111, Issue 04.2014, February 2014, pages 12-23
Suggested citation
R, Griffith and H, Miller and M, O'Connell. (2014). 'Ownership of intellectual property and corporate taxation' 111(04.2014/2014), pp.12–23.
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