Essays on the real effects of taxation : implications of tax incentives and tax complexity

Kurzfassung/Abstract

This dissertation examines the role of tax policy in enhancing a country’s attractiveness as a business location and promoting corporate investment, innovation, and economic growth. Against the backdrop of declining economic growth in Germany and increasing structural challenges, the study investigates whether tax incentives and efficient tax frameworks can stimulate private investment and strengthen international competitiveness.
The dissertation consists of three empirical studies. Chapter 1 analyzes the effects of tax incentives for automation using a quasi-natural experiment based on a reduction in South Koreas automation tax credit and a difference-in-differences approach combining robot and firm-level data.
Chapter 2 evaluates the effectiveness of indirect tax incentives for research and development (R&D), focusing on Germany’s research allowance and drawing on both existing empirical evidence and innovation data.
Chapter 3 examines the economic consequences of tax complexity using an international sample of publicly listed firms and a two-way fixed effects regression framework.
The findings show that tax incentives significantly influence corporate investment decisions. Automation tax incentives increase investment in automation but may also encourage inefficient over investment, while their reduction leads to lower automation investment and higher employment. R&D tax incentives stimulate research expenditure, innovation output, productivity, and R&D-related employment. At the same time, the results demonstrate that tax complexity imposes substantial economic costs by reducing firm value, increasing compliance burdens, and weakening the effectiveness of tax incentives.
Overall, the dissertation highlights that tax policy can contribute to economic growth and location attractiveness when it simultaneously provides targeted investment incentives and maintains a transparent and efficient tax system. The findings offer important implications for the design of tax policy aimed at fostering investment, innovation, and long-term competitiveness.