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Taxation and the Global Allocation of Intangibles

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Abstract

We study how international tax systems shape the global allocation of intangible assets. Firm-level data show that cross-border patent ownership transfers respond strongly to tax differentials, especially within multinational firms, while arm’s-length transfers are more closely associated with intellectual property rights (IPR) protection. We develop a model in which patent owners choose whether to license, sell, or transfer patents to a foreign affiliate, linking tax rates, IPR protection and transfer-pricing wedges to patent location. Counterfactuals suggest that tax harmonization and stronger enforcement reduce profit shifting and expand the US royalty tax base, whereas a global minimum tax has limited effects.

Suggested Citation

  • Jesse LaBelle & Fernando M. Martin & Ana Maria Santacreu, 2025. "Taxation and the Global Allocation of Intangibles," Working Papers 2025-025, Federal Reserve Bank of St. Louis, revised 21 May 2026.
    • Handle: RePEc:fip:fedlwp:101822
    DOI: 10.20955/wp.2025.025
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    1. Fosfuri, A. & Helmers, C. & Roux, C., 2012. "Are joint patents collusive? Evidence from the US and Europe," Discussion Paper 2012-035, Tilburg University, Tilburg Law and Economic Center.
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    Keywords

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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