The Taxman Calls, How Does Facebook Answer? Global Effects of Taxation on Online Advertising
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Datum
2017-09Typ
- Working Paper
ETH Bibliographie
yes
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Abstract
We study the effects of the taxation of digital platforms on the online advertising market. We exploit novel data on daily unit prices of Facebook ads targeted to country-specific audiences, collected around a major change in the firm’s accounting practices following the introduction of the UK Diverted Profit Tax. We show that a substantial increase in ads prices followed such change, although with heterogeneous intensity across countries. These results are in line with a model of a platform operating in the global advertising market. We show that taxation of profits generated in one country makes the price charged to advertisers from that country (resp. other countries) increase (decrease). Accordingly, we demonstrate that aggregate advertising prices in OECD countries increased more, after the policy change, the larger is the market share of UK-based advertisers. Mehr anzeigen
Publikationsstatus
publishedZeitschrift / Serie
NET Institute Working Paper SeriesBand
Verlag
NET InstitueThema
Tax incidence; Digital economy; online advertisingOrganisationseinheit
03988 - Köthenbürger, Marko / Köthenbürger, Marko
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
03840 - Egger, Peter / Egger, Peter
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Is part of: http://www.netinst.org/NET_Working_Papers.html
ETH Bibliographie
yes
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