Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279548 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-037
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We study the economic consequences of anti-loss trafficking rules, which disallow the use of loss carry-forwards as tax shield after a substantial ownership change. Using staggered changes to these rules, we find that limiting the transfer of tax losses reduces the number of M&As with loss-making targets by 22%. We further observe decreases in birth and survival rates of young companies in response to stricter regulations and vice versa. Tightening (loosening) anti-loss trafficking rules impairs (increases) return on assets, especially for R&D-intensive firms, and stricter rules lead to a decrease in successful patent applications.
Subjects: 
Mergers and acquisitions
anti-loss trafficking rules
taxes
market entry
market exit
productivity
innovation
JEL: 
G34
G38
H25
Document Type: 
Working Paper

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