Research
The Chair focuses on theoretical and empirical research in the areas of:
- international corporate taxation,
- fiscal federalism and
- the public economics of digitisation.
International Corporate Taxation
The importance of multinational firms within the economy has increased over time. Nowadays, most production takes place within multinational firms. The chair is involved in a variety of projects related to the taxation of these firms. For instance, multinational firms might engage in profit shifting to reduce their tax liability. We analyse whether this tax avoidance behaviour contributes to increased investment and thereby produces real effects on the economy. Preferential tax regimes in the form of patent boxes have recently been introduced in many European countries, including Switzerland. We analyse whether such preferential tax regimes have unintended effects on tax revenues in the countries in which they are introduced. Further, the system of formula apportionment has been used in various countries, and might be a policy option for corporate taxation in the European Union. Members of the group analyse the implications of this system for tax revenues and welfare.
Fiscal Federalism
Governments resort to different degrees of policy decentralisation in providing public services. Recent trends in mergers of local governments and increases in urban density (creation of mega-cities) are two aspects of decentralised government that affect public services. In a series of research projects, the group is looking at the implications of municipal mergers in Germany and Switzerland for tax policies and, more broadly, for the spatial distribution of economic activity. Questions related to urban development form part of research projects that combine theoretical analyses with administrative data. For example, the group analyses where to locate public facilities like public schools using a quantifiable general equilibrium model.
Digitisation and Multi-sided Platforms
The roles of digital technologies and their related digital markets form the focus of various of the chair’s projects. For instance, the societal aspects of multi-sided digital markets have recently received increased attention. Consumer tracking allows platforms in these markets to generate advertising income. The amount of data that is collected and the taxation of the resulting profits are core elements in public policy discussions and in the group’s research. The issues of digitisation and policy are also key to the ETH+ initiative “Digital Transformation & Society”.