My name is Amirhossein Tavakoli, and I am a PhD Candidate at the UBC’s Vancouver School of Economics. My research interests are in Innovation, Public Economics, and Labor Economics. In my job market paper, I study the impact of R&D tax credits on firm performance and its implications for between-firm and within-firm wage inequality.

I am available for interviews in the 2024-2025 job market.

Job Market Paper

R&D Expenditures, Rents, and Wage Inequality: Evidence from an R&D Tax Credit

Abstract | Paper

This paper examines the impact of R&D tax credits on firm-level and worker-level outcomes, using the Scientific Research and Experimental Development (SRED) tax credit in Canada. Leveraging a regression kink design and matched employer-employee tax records, I estimate a large and statistically significant increase on R&D expenditures. The results show that R&D-intensive firms respond to tax credits with substantial increases in R&D expenditures, leading to significant gains in profitability, surplus per worker, after-tax income per worker, and wages while non-R&D-intensive firms show minimal changes. These gains disproportionately benefit high-skill, older, and long-tenured workers, exacerbating wage inequality both between and within firms. High-skill workers experience the largest earnings gains, with a 10 percent increase in EL leading to a 1.6 percent rise in their earnings, while low-skill workers see no significant changes. These findings provide evidence of rent-sharing mechanisms and highlight the role of R&D tax credits in contributing to wage inequality. Robustness checks confirm the stability of the results across different model specifications.

Working Papers

Job Transitions and Employee Earnings After Acquisitions: Linking Corporate and Worker Outcomes, with David Arnold, Kevin Milligan, Terry Moon

Abstract | Paper

This paper connects changes in employer characteristics through job transitions to employee earnings following mergers and acquisitions. Using firm balance sheet data linked to individual earnings data in Canada and a matched difference-in-differences design, we find that earnings of workers at target firms decrease after M&As, largely driven by those who move to other firms. Workers leaving targets move to larger and more profitable firms, but experience wage declines potentially due to a loss of firm-specific human capital or backloaded contracts. It appears that losses of match-specific premiums from job transitions primarily explain the post-M&A earnings decline in our setting.

Corporate Acquisitions and Investment: Evidence from Europe with David Arnold and Terry Moon

Abstract | Paper

This paper assesses how corporate M&As affect firms’ investment in long-term capital. Using financial data (2009 – 2018) for 10 European countries, we compare firms that went through M&As with similar non-M&A firms before and after the events. We find that acquirers significantly decreased their fixed assets after M&As and that the reduction was not driven by reallocation between merging parties or across different types of assets. Heterogeneity analyses based on industries reveal that the decline in investment was unlikely driven by the market power channel. Instead, acquirers appear to reduce long-term assets and increase debts to finance their acquisitions.

Publications

What do one hundred million transactions tell us about demand elasticity of gasoline?, with Mohammad Vesal, Mohammad H. Rahmati

Abstract | Paper

The price elasticity of gasoline demand is a key parameter in evaluating various policies. However, most of the literature uses aggregate data to identify this elasticity. Temporal and spatial aggregation make such elasticity estimates biased. We employ a unique dataset of all gasoline transactions in Iran during a 4-month period around an unexpected exogenous price change to identify that price elasticity. We also identify a significant withholding behaviour by consumers in response to anticipated price changes. The consumers reduce or postpone their purchases when they expect a price decrease. Controlling for date fixed effects would eliminate homogeneous withholding responses. However, heterogeneous responses to this anticipated price change would lead to overestimating price elasticity. After controlling for date, individual, and location fixed effects as well as the withholding behaviour, we estimate a robust significant price elasticity of − 0.085. Aggregation of the same data by week, month, and city yields an estimate of − 0.3, indicating a significant bias in earlier studies.