Membership
Membership Five Good Reasons for Becoming a Member of the Halle Institute for Economic Research (IWH) The Halle Institute for Economic Research (IWH) - Member of the Leibniz…
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Projects
Our Projects 07.2022 ‐ 12.2026 Evaluation of the InvKG and the federal STARK programme On behalf of the Federal Ministry of Economics and Climate Protection, the IWH and the RWI…
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R&D Tax Credits and the Acquisition of Startups
William McShane, Merih Sevilir
IWH Discussion Papers,
No. 15,
2023
Abstract
We propose a novel mechanism through which established firms contribute to the startup ecosystem: the allocation of R&D tax credits to startups via the M&A channel. We show that when established firms become eligible for R&D tax credits, they increase their R&D and M&A activity. In particular, they acquire more venture capital (VC)-backed startups, but not non-VC-backed firms. Moreover, the impact of R&D tax credits on firms’ R&D is increasing with their acquisition of VC-backed startups. The results suggest that established firms respond to R&D tax credits by acquiring startups rather than solely focusing on increasing their R&D intensity in-house. We also highlight evidence that startups do not appear to benefit from R&D tax credits directly, perhaps because they typically lack the taxable income necessary to directly benefit from the tax credits. In this context, established firms can play an intermediary role by acquiring startups and reallocating R&D tax credits, effectively relaxing the financial constraints faced by startups.
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26.06.2023 • 17/2023
Presseeinladung ‒ Save the Date: Tagung zum Strukturwandel in den Braunkohlerevieren
Drei Jahre nach dem Beschluss zum Kohle-Aus in Deutschland lädt das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) gemeinsam mit dem Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) und der Brandenburgischen Technischen Universität Cottbus-Senftenberg (BTU) am 9. und 10. November 2023 zu einer transdisziplinären Strukturwandeltagung ein.
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People
People Job Market Candidates Doctoral Students PhD Representatives Alumni Supervisors Lecturers Coordinators Job Market Candidates Tommaso Bighelli Job market paper: "The…
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DPE Course Programme Archive
DPE Course Programme Archive 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2023 Microeconomics several lecturers winter term 2023/2024 (IWH) Econometrics several…
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Lecturers
Lecturers at CGDE Institutions Jordan Adamson Assistant Professor at Institute for Empirical Economic Research, Leipzig University. Website Course: Econometrics (winter term…
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Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
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IWH Retreat Kick-off
IWH Retreat: Kick-off Meeting from Oliver Holtemöller, April 19, 2022 Dear all, On 08 and 09 June 2022, our retreat at Schwielowsee near Potsdam will take place. The motto is…
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Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK
Ufuk Akcigit, Raman Chhina, Seyit Cilasun, Javier Miranda, Eren Ocakverdi, Nicolas Serrano-Velarde
IWH Discussion Papers,
No. 9,
2023
Abstract
Small and young businesses are essential for job creation, innovation, and economic growth. Even most of the superstar firms start their business life small and then grow over time. Small firms have less internal resources, which makes them more fragile and sensitive to macroeconomic conditions. This suggests the need for frequent and real-time monitoring of the small business sector’s health. Previously this was difficult due to a lack of appropriate data. This paper fills this important gap by developing a new Intuit QuickBooks Small Business Index that focuses on the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada. The Index aggregates a sample of anonymous Quick- Books Online Payroll subscriber data (QBO Payroll sample) from 333,000 businesses in the US, 66,000 in Canada, and 25,000 in the UK. After comparing the QBO Payroll sample data to the official statistics, we remove the seasonal components and use a Flexible Least Squares method to calibrate the QBO Payroll sample data against official statistics. Finally, we use the estimated model and the QBO Payroll sample data to generate a near real-time index of economic activity. We show that the estimated model performs well both in-sample and out-of-sample. Additionally, we use this analysis for different regions and industries. Keywords:
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