IP box effects in the gaming industry

PurposeThis paper aims to verify how the intellectual propertyuce their tax rate to increase their investment and innovativeness. With a panel model approach – system GMM and DiD with multiple time periods – it analyses data from the Orbis database for 2011–2019 of 673 firms from the gaming industry in 11 countries and hand-collected data on intellectual property rights protection. The authors study public and private companies from the gaming sector in leading European markets and all three countries that protect intellectual property rights of software (Japan, South Korea, the USA).FindingsRecent reforms enable gaming companies to use preferential tax treatment for IP-related income and significantly impact a firm’s revenue growth.Practical implicationsNevertheless, European gaming firms require time to leap the gap to the growth and innovativeness of countries that protect software.Originality/valueThe authors show that the IP box stimulates gaming firms to protect IP via wordmarks, figurative marks, trademarks and software patents that bring effects in five years. Despite the critics against IP box, the authors prove its lagged efficiency, especially in profitable and larger firms.