Current Research Projects (selected)


Spatial Tax Enforcement Spillovers: Evidence from South Africa

Revision invited at The Economic Journal

 

The purpose of this paper is to test for spatial enforcement spillovers. Empirical testing ground is the enforcement of business taxes in South Africa. The analysis relies on the population of business tax returns for the years 2009 to 2014 and data on all business taxpayer audits by the South African Revenue Services during that time period. The results suggest that audits significantly raise the tax reporting of non-audited neighboring firms. While the observed spillovers decline in geographic distance to the audited entity and are short-run in nature, the implied aggregate revenue gains are non-negligible. Additional analysis shows that the effect is driven by audit cases, where audited firms do not experience an upward revision in their tax owed in the course of the audit. This suggests that the observed effect roots in communication among taxpayers and is not driven by audit-related cost shocks to business partners.

Transfer Price Documentation Rules and Multinational Firm

Behavior - Evidence from France

Revision submitted to Journal of Public Economics

 

In recent years, a growing number of countries have enacted tax rules that require multinational enterprises (MNEs) to document their intra-firm trade prices and show that they are set as in third-party trade. The objective of these rules is to limit opportunities for strategic trade mis-pricing and profit shifting to lower-tax affiliates. In this paper, we study the regulations’ fiscal and real effects. Testing ground is the introduction of transfer price (TP) documentation rules in France in 2010. Drawing on rich firm-level data, we show that affected MNEs reduced their outward profit shifting from France, while simultaneously lowering real investments in the country. Outside of France, treated MNEs decreased their real economic activity at low-tax (but not at high-tax) group locations.

The Effects of Free Secondary School Track Choice: A Disaggregated Synthetic Control Approach

 

We exploit a recent state-level reform in Germany that granted parents the right to decide on the highest secondary school track suitable for their child, changing the purpose of the primary teacher's recommendation from mandatory to informational. Applying a disaggregated synthetic control approach to administrative district-level data, we find that transition rates to the higher school tracks increased substantially, with stronger responses among children from richer districts. Simultaneously, grade repetition in the first grades of secondary school increased dramatically, suggesting that parents choose school tracks also to align with their own aspirations - resulting in greater misallocation of students.

Prof Dr. Kristina Strohmaier

Any questions, ideas or fruitful comments? Please do not hestitate to contact me!

University of Duisburg-Essen, Universitätsstraße 12, 45117 Essen

Email: kristina.strohmaier@uni-due.de

Phone: +49 - (0) 201 18-33633