Arbeitspapier
Tax Policy and the Dynamic Demand for Domestic and Foreign Capital by Multinational Corporations
The extent to which domestic and foreign operations of multinational corporations (MNCs) are related has important implications for the analysis of investment demand and its responsiveness to tax policy. We estimate the structural parameters of a model in which domestic and foreign investment interact in two important ways. First, the MNC's production technology allows the marginal products of domestic and foreign capital to be interdependent. Second, the marginal adjustment costs of investment in one locaton may be affected by investment in other locations. We estimate the model using firm-level panel data from Canadian MNCs that invest solely in the United States. Our estimtes support the view that production and adjustment cost technologies are related. We find that domestic and foreign capital are greater than unit elastic substitutes and that investment in one location lowers the marginal adjustment cost of investment in the other location. We use our parameter estimates to simulate the effect of various tax policies on the growth of parent and affiliate capital stocks. The simulations demonstrate that allowing for interdependent capital demand across locations has important implications for the analysis of tax policy towards MNCs.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 1998-08
- Klassifikation
-
Wirtschaft
Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
Investment; Capital; Intangible Capital; Capacity
International Investment; Long-term Capital Movements
- Thema
-
International factor substitution
International taxation
Investment
Production
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Altshuler, Rosanne
Cummins, Jason
- Ereignis
-
Veröffentlichung
- (wer)
-
Rutgers University, Department of Economics
- (wo)
-
New Brunswick, NJ
- (wann)
-
1998
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Altshuler, Rosanne
- Cummins, Jason
- Rutgers University, Department of Economics
Entstanden
- 1998
Ähnliche Objekte (12)
Decomposing multinational corporations' declining effective tax rates
Multinational corporations' effective tax rates: Evidence from orbis
The impact of tax complexity on multinational corporations
The Tax-Efficient Use of Debt in Multinational Corporations
Policies for multinational corporations
Multinational corporations and tax havens: Evidence from country-by-country reporting
Multinational Corporations and Transaction Costs
Critical remarks on multinational corporations
The effect of international tax incentives on the activities of multinational corporations
On the dynamics between local and international tax planning in multinational corporations
The case of taxing multinational corporations in Uganda: Do multinational corporations face lower effective tax rates and is there evidence for profit shifting?
Business Strategies of the Multinational Corporations
Decomposing multinational corporations' declining effective tax rates
Multinational corporations' effective tax rates: Evidence from orbis
The impact of tax complexity on multinational corporations
The Tax-Efficient Use of Debt in Multinational Corporations
Policies for multinational corporations
Multinational corporations and tax havens: Evidence from country-by-country reporting
Multinational Corporations and Transaction Costs
Critical remarks on multinational corporations
The effect of international tax incentives on the activities of multinational corporations
On the dynamics between local and international tax planning in multinational corporations
The case of taxing multinational corporations in Uganda: Do multinational corporations face lower effective tax rates and is there evidence for profit shifting?
Business Strategies of the Multinational Corporations
Decomposing multinational corporations' declining effective tax rates
Multinational corporations' effective tax rates: Evidence from orbis
The impact of tax complexity on multinational corporations
The Tax-Efficient Use of Debt in Multinational Corporations
Policies for multinational corporations
Multinational corporations and tax havens: Evidence from country-by-country reporting
Multinational Corporations and Transaction Costs
Critical remarks on multinational corporations
The effect of international tax incentives on the activities of multinational corporations
On the dynamics between local and international tax planning in multinational corporations
The case of taxing multinational corporations in Uganda: Do multinational corporations face lower effective tax rates and is there evidence for profit shifting?