IWH FDI Micro Database
IWH FDI Micro Database The IWH FDI Micro Database (FDI = Foreign Direct Investment) comprises a total population of affiliates of multinational enterprises (MNEs) in selected…
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IWH Subsidy Database
Background Every year, companies in Germany receive subsidies from the German state, the Laender, and the European Union. These are quite high, ranging in double-digit billion…
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Research Clusters
Three Research Clusters Research Cluster "Economic Dynamics and Stability" Research Questions This cluster focuses on empirical analyses of macroeconomic dynamics and stability.…
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Tasks
Tasks of the IWH Guided by its mission statement , the IWH places the understanding of the determinants of long term growth processes at the centre of the research agenda. Long…
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Projects
Our Projects 07.2022 ‐ 12.2026 Evaluation of the InvKG and the federal STARK programme On behalf of the Federal Ministry of Economics and Climate Protection, the IWH and the RWI…
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Research Groups
Our Research Groups Banking, Regulation, and Incentive Structures Data Science in Financial Economics Econometric Tools for Macroeconomic Forecasting and Simulation Education,…
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R&D Tax Credits and the Acquisition of Startups
William McShane, Merih Sevilir
IWH Discussion Papers,
No. 15,
2023
Abstract
We propose a novel mechanism through which established firms contribute to the startup ecosystem: the allocation of R&D tax credits to startups via the M&A channel. We show that when established firms become eligible for R&D tax credits, they increase their R&D and M&A activity. In particular, they acquire more venture capital (VC)-backed startups, but not non-VC-backed firms. Moreover, the impact of R&D tax credits on firms’ R&D is increasing with their acquisition of VC-backed startups. The results suggest that established firms respond to R&D tax credits by acquiring startups rather than solely focusing on increasing their R&D intensity in-house. We also highlight evidence that startups do not appear to benefit from R&D tax credits directly, perhaps because they typically lack the taxable income necessary to directly benefit from the tax credits. In this context, established firms can play an intermediary role by acquiring startups and reallocating R&D tax credits, effectively relaxing the financial constraints faced by startups.
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People
People Job Market Candidates Doctoral Students PhD Representatives Alumni Supervisors Lecturers Coordinators Job Market Candidates Tommaso Bighelli Job market paper: "The…
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DPE Course Programme Archive
DPE Course Programme Archive 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2023 Microeconomics several lecturers winter term 2023/2024 (IWH) Econometrics several…
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Lecturers
Lecturers at CGDE Institutions Jordan Adamson Assistant Professor at Institute for Empirical Economic Research, Leipzig University. Website Course: Econometrics (winter term…
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