Arbeitspapier
Internal digitalization and tax-efficient decision making
Our study investigates firms' internal digitalizationas a crucial foundation for timely, data-driven decision making. We evaluate the association between digital infrastructure and improved decision making intax planning decisions to analyze if the benefits of digitalization expand beyond firms' core business functions. The novel use of a survey that identifies European firms' digital infrastructure over the period from 2005 to 2016 allows us to create an index of IT sophistication. Using this index, we extend prior approaches and observe the effectiveness of tax planning decisions in terms of a firm's ability to exploit income shifting incentives. Our empirical analysis confirms the prediction that digitalized firms respond more efficiently to income shifting incentives. Further, we provide evidence that firms with sophisticated IT are more reactive to shocks in the income shifting incentive than non-digital firms. Our results suggest that internal digitalization allows firms to efficiently monitor and manage internal processes and to strategically price internal transactions. With this work, we are the first to document the association of digitalization and the performance of firms' support functions.
- Sprache
-
Englisch
- Erschienen in
-
Series: ZEW Discussion Papers ; No. 20-051
- Klassifikation
-
Wirtschaft
Technological Change: Choices and Consequences; Diffusion Processes
Firm Performance: Size, Diversification, and Scope
Business Taxes and Subsidies including sales and value-added (VAT)
Tax Evasion and Avoidance
Tax Law
- Thema
-
Digital Transformation
Digitalization
Firm Performance
Decision Making
Multinational Corporations
Business Taxation
Information Technology
Profit Shifting
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Klein, Daniel
Ludwig, Christopher A.
Nicolay, Katharina
- Ereignis
-
Veröffentlichung
- (wer)
-
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
- (wo)
-
Mannheim
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Klein, Daniel
- Ludwig, Christopher A.
- Nicolay, Katharina
- ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
Entstanden
- 2020
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