Corporate tax effects on the quality and quantity of FDI

This paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. Quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country. Quality effects arise if taxes decrease the extent to which investment contributes to the corporate tax base and the capital intensity of production. Depending on the sign of the quality effects, the detrimental welfare effects of corporate taxation are either mitigated or aggravated. We derive a number of hypotheses how corporate tax changes may affect the quality of investment. Our hypotheses are then tested using data from a large sample of European multinationals. With regard to corporate tax effects on the corporate tax base, we find that quality effects account for up to fourty per cent of the total effect. With regard to corporate tax effects on labour income, our results suggest that quality effects mitigate the negative quantity effect by nearly sixty percent (as corporate taxes strongly increase the labor intensity of production). An important implication is that governments should not exclusively care about the size of inbound FDI flows but also about their specific characteristics, i.e. their quality

Do higher corporate taxes reduce wages? : Micro evidence from Germany

Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden

Molecular and functional characterization of BDNF-overexpressing human retinal pigment epithelial cells established by sleeping beauty transposon-mediated gene transfer

More and more patients suffer from multifactorial neurodegenerative diseases, such as age-related macular degeneration (AMD). However, their pathological mechanisms are still poorly understood, which complicates the development of effective therapies. To improve treatment of multifactorial diseases, cell-based gene therapy can be used to increase the expression of therapeutic factors. To date, there is no approved therapy for dry AMD, including late-stage geographic atrophy. We present a treatment option for dry AMD that transfers the brain-derived neurotrophic factor (BDNF) gene into retinal pigment epithelial (RPE) cells by electroporation using the plasmid-based Sleeping Beauty (SB) transposon system. ARPE-19 cells and primary human RPE cells were co-transfected with two plasmids encoding the (SB100X) transposase and the transposon carrying a BDNF transcription cassette. We demonstrated efficient expression and secretion of BDNF in both RPE cell types, which were further increased in ARPE-19 cell cultures exposed to hydrogen peroxide. BDNF-transfected cells exhibited lower apoptosis rates and stimulated neurite outgrowth in human SH-SY5Y cells. This study is an important step in the development of a cell-based BDNF gene therapy that could be applied as an advanced therapy medicinal product to treat dry AMD or other degenerative retinal diseases