Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216545 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8149
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study the effects of taxation on the international online advertising market, using data on Facebook ad prices, Facebook users product preferences and international trade. Our data encompass a de facto increase in the platform's corporate tax rate in several countries. We show that, due to international trade linkages, tax changes produce global spillovers. Yet, advertisers experience higher prices in countries that directly face the tax increases compared to advertisers in countries that do not. This result is consistent with a theoretical model, which shows that the platform reduces the supply of ads to advertisers from countries where taxation increases.
Subjects: 
tax incidence
online advertising
Facebook
JEL: 
H22
H25
F23
Document Type: 
Working Paper
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