Forskningsseminar: Tax neutrality, entry and discoveries: Evidence from oil drilling in the North Sea

 

Torfinn Harding, NHH: https://www.nhh.no/en/employees/faculty/torfinn-harding/

Tax neutrality, entry and discoveries: Evidence from oil drilling in the North Sea

Abstract:

Cash-flow taxation calls for cash refunds to loss-making firms to leave entry and exit decisions undistorted. We study the introduction of such a refund program in the Norwegian petroleum sector in 2005. Using data on oil exploration in Norway and the UK, we find that the program generated 37% of all new wells, but only 6% of all new discoveries in the period 2005-2015. The drastic drop in discovery rates is consistent with a common value model with endogenous entry. We find that the social benefits of the new discoveries are roughly offset by the cost of dry wells.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Servering av kaffe, te og baguetter fra  11:30