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Tesla Patent Pledge a Win-Win; Tax Code the Scandal in EU Probe: UMD Experts

Jun 16, 2014
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Media Alert: June 16, 2014
Attention Business and Financial Reporters and Editors

COLLEGE PARK, Md. – Faculty experts in the University of Maryland’s Robert H. Smith School of Business are available to expand on comments, below, regarding Tesla Motors CEO Elon Musk announcing his company will open its patented technology to competitors and European Union regulators investigating whether such major firms as Apple and Starbucks are violating EU tax law. 

Rajshree Agarwal: Patent Pledge Signals Tesla, Electric Car Industry Breakthrough 

“The electric car industry, in a pre-sales take off stage, needs to attract new consumers by diffusing its technology as quickly as possible for widespread adoption among competitors. Such industry growth would fuel Tesla's growth, too. 

“From an intellectual property point of view, all a patent provides is the right to sue in court for patent violations. Musk smartly is prioritizing electric car market penetration ahead of competing with other industry innovators and firms.”

Agarwal, the Rudolph P. Lamone Chair and professor in Entrepreneurship, focuses her research on the implications of entrepreneurship and innovation for industry and firm evolution. Contact her at 301-405-2250 or rajshree@rhsmith.umd.edu

Michael Faulkender: 'Tax Code the Scandal’ in EU Probe 

"The probe brings to mind last year's U.S. Senate investigation (and finding that Apple shielded $44B from 2009-2012 from U.S. tax collection).  Significantly, no allegations of illegality by Apple surfaced -- because the scandal is the tax code itself. 

"As financial markets become more integrated, and as international trade barriers decline, the need for cross-country consistency on tax structure increases. If this EU investigation is like last year’s Senate hearing, and merely a show trial for the media, it is a waste of time. If the EU probe actually moves us towards cross-country standardization of tax practices so that companies no longer have incentives to structure operations in ways that arbitrage tax treaties, then the probe could be productive.” 

Faulkender, associate professor and director of Smith’s Masters Program in Finance, with co-author Mitchell Petersen (Northwestern University), recently earned the Review of Financial Studies’ Best Paper Award for “Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act” – a study covering corporate repatriation tax activity and corporate tax reform.

Contact him at 301-405-1064 or mfaulken@rhsmith.umd.edu.

About the University of Maryland's Robert H. Smith School of Business 

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, MS in business, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.