Dr Alminas Zaldokas, Hong Kong University of Science and Technology (HKUST)
We examine staggered changes in state-level corporate tax rates to show that an increase in taxes reduces future innovation. To sharpen our analysis, we exploit a novel dataset containing information on the geography of firms’ operations, and document that the effect is stronger among firms that have a higher proportion of operations in states that pass tax changes, and those that are located in states with laws that make shifting profits out of the state for tax reasons more difficult. Finally, we address concerns regarding endogeneity of tax changes by using instruments based on state-specific legislative rules; and accounting for local economic conditions by exploring how tax changes affect firms located in counties bordering other states.
Alminas Zaldokas has been an Assistant Professor at the Department of Finance, HKUST since 2012. He has a PhD in Finance from INSEAD, and an MSc in Finance and Economics from the London School of Economics and Political Science.