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

• Published in: Entrepreneurial Business and Economics Review Vol. 5; no. 4; pp. 11 - 34
• Main Authors: Zdziarski, Michał, Troilo, Michael, Markham Collins, J
• Format: Journal Article
• Language: English
• Published: Krakow Uniwersytet Ekonomiczny w Krakowie 01.01.2017; Cracow University of Economics
• Subjects: Competition; competitiveness; Compliance; Costs; Decision making; ease of paying taxes; Economic summit conferences; Efficiency; Entrepreneurs; Entrepreneurship; High technology; Holidays & special occasions; ICT Information and Communications Technologies; Impact analysis; International; international business; Licenses; Licensing; Literature reviews; Longitudinal studies; National Economy; Regulation; stages of economic development; Studies; Tax rates; Taxes; Technology transfer; ease of paying taxes; competitiveness; technology transfer; international business; licensing; stages of economic development
• ISSN: 2353-883X; 2353-8821
• DOI: 10.15678/EBER.2017.050401

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.