A collective research paper entitled “Do corporate taxes hinder innovation?” co-authored by our faculty has received the Vladas Jurgutis Award organized by the Board of the Bank of Lithuania. The paper was published in the Journal of Financial Economics – one of the leading academic journals in finance.
The paper was co-authored by Associate Professors Alminas ZALDOKAS and Abhiroop MUKHERJEE (Liwei Huang Associate Professor of Business) from the Department of Finance at HKUST and Assistant Professor Manpreet SINGH from the Scheller College of Business.
The paper compared similar companies from various states located close to internal borders in the US. These states are only separated by state borders and have similar exposures to economic trends. This allowed the co-authors to estimate what happens when one of these states raises corporate taxes for reasons unrelated to the overall economy.
The paper concluded that companies operating in states that raise taxes reduce their investment in innovation, obtain fewer patents for innovation, and place fewer new products on the market. Ultimately, raising corporate taxes can cause a ripple effect on the overall economic growth.
The Vladas Jurgutis Award accepts entries from economic researchers and Ph.D. candidates in economics or finance on an annual basis. Submitted papers are assessed by a commission of researchers from the Bank of Lithuania’s Center for Excellence in Finance and Economic Research (CEFER) and representatives of Lithuanian and other overseas universities.
Congratulations to all professors.
