Competitiveness, Technology Licensing, and Ease of Paying Taxes: A 30-Country Study
Competitiveness, Technology Licensing, and Ease of Paying Taxes: A 30-Country Study

Summary/Abstract: Objective: The objective of this paper is to explore the impact of the ease of paying taxes on the likelihood of technology licensing and, hence, the sales of firms acquiring such licenses across 30 countries. Research & Design & Methods: In a comparative, longitudinal study design we apply random effects panel logit, and random-effects gls regression models Findings: Tax compliance reduces the likelihood of technology licensing. Technology licensing has only modest effects on sales. Foreign ownership of firms increases both the likelihood of technology licensing and revenues. Implications & Recommendations: All manner of political entities, from towns to entire nations, revise their tax policies to woo investment. Our current analysis of the marginal effects suggests that the impact of these improvements is underwhelming. Attracting foreign ownership is recommended to increase technology licensing, sales and competitiveness. Contribution & Value Added: While tax holidays are a common device to woo investment, the interaction of tax regimes with technology licensing, specifically the burden of preparing and paying taxes, is scarcely studied. It is a gap we strive to fill in this manuscript.

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