data visualization; data extraction and linking; data platform; firms location decisions; tax competition
Tua Davide Paolo, Minelli Roberto, Lanza Michele, Voronoi Evolving Treemap, in Proceedings of VISSOFT 2021 (9th Working Conference on Software Visualization)
, IEEE CS Press, New York.
Digitalization is rapidly transforming local economies. Firms become increasingly more footloose and intricated in complex networks; markets once competitive become concentrated and the spatial concentration of economic activities put peripheral regions at risks. In particular, as tax bases become more mobile and integrated, tax revenues for regional and local jurisdictions become more and more elusive. In this context, tax competition might be harmful and coordinated tax policies welfare-enhancing. Understanding these dynamics is key to reform the corporate tax system. Yet, little is known on firms, in particular on their organizational and network structure, how this structure evolves over time and space, and how differential tax rates affect firms’ location and organizational choices. The goal of this project is twofold: 1) Data platform. Build an open and extensible data platform that allows to follow firms over time and space, from their creation to their exit, and obtain information on their legal structure; their network, both direct (firm-firm) and indirect (firm-owner-firm) and their (gross) capital. This platform will be built to support real-time aggregation and the analysis of data on the universe of firms in Switzerland, including services providing querying and visualizations to analyze the data at scale. Digitalization offers in that respect an opportunity to offer better services to companies, citizens and communities.2) Tax competition and firms’ location decisions in a digital economy. The second aim of the project is to harvest the power of this data platform to study the effect of cantonal and local corporate tax differentials on firms’ location and organizational decisions, with a special focus on the new sectors of the digital economy. A key feature of the data platform is to identify these new sectors, their link to the traditional sectors and their degree of spatial concentration. Second, by following firms over time and space we will be able to study whether tax competition is a zero-sum, hence harmful game (attracting firms from other jurisdictions while leaving all jurisdictions with lower tax revenue) or a positive-sum game (creating more firms and jobs that compensate for revenue losses). Answering this question is key to reform the corporate tax system to ensure fair competition and innovation capabilities for all regions.