Winner of The Bent Dalum PhD Award 2017

In Memory of Bent Dalum

The DRUID Academy Conference 2017 for doctoral students in
ECONOMICS AND MANAGEMENT OF INNOVATION, TECHNOLOGY AND ORGANIZATIONS
University of Southern Denmark

On the International Changes of Patent Ownership: Strategic Relocation and Patent Boxes

 

Laurie Ciaramella
Mines ParisTech, CERNA

 

 

 

 

 

 

Abstract:
Firms can make use of the discretionary aspect of the location of patent ownership to avoid taxation and maximise their profits. This paper investigates strategic patent transfers with regard to Patent Box regimes, and study how firms’ incentives to relocate patents vary with the heterogeneity of the designs of Patent Box regimes. Using a comprehensive dataset on international patent transfers, we find that Patent Box countries significantly attract more patent relocations, and that incoming flows increase in the tax rebate. The fiscal incentives are stronger in countries with a high R&D level, suggesting multiple dimensions in firms’ decisions of patent relocation. This is all the more so true for high quality patents. Finally, our results indicate that policy makers could play on the features of Patent Box regimes to affect firms’ incentives, and deter relocation driven by fiscal optimization motives.