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Abstract

Chapter 2 examines the incidence of R&D tax credits on workers’ wages and the underlying mechanisms. Leveraging a regression kink design with matched employer–employee tax records, I show that R&D tax credits substantially increase firms’ R&D expenditures. Responses are concentrated among R&D-intensive firms, where higher spending leads to gains in profitability, productivity, and wages. These benefits accrue primarily to incumbent workers, with high-skill, long-tenured, and older employees experiencing the largest earnings increases: a 10 percent rise in expenditure limit raises their annual wages by 1.2–1.9 percent. In contrast, entrants and less-skilled, younger, or short-tenured workers experience no significant wage effects. The results are consistent with a rent-sharing framework and highlight the role of R&D policy in shaping within-firm wage inequality. Chapter 3 connects changes in employer characteristics through job transitions to employee earnings following mergers and acquisitions (M&As). Using firm balance sheet data linked to individual earnings data in Canada and a matched difference-in-differences design, we find that workers at target firms experience a post-M&A earnings decline, driven largely by those who leave. Although movers transition to larger and more profitable firms, they face wage losses, likely reflecting the erosion of firm-specific human capital or backloaded contracts. The evidence suggests that the loss of match-specific premiums is the primary mechanism behind post-M&A wage declines. Chapter 4 examines the impact of corporate M&As on firm profitability and markups. Using financial data (2010 - 2018) for 10 European countries and a matched difference-in-differences design, we find that acquirers’ and targets’ markups remain unchanged, while their profitability declines substantially. Heterogeneity analyses across sectors and deal types confirm that these patterns are inconsistent with a market power channel. Instead, the evidence indicates that acquisitions are associated with weaker medium-run performance rather than increasing market power.