Arbeitspapier
The Effects of Multinationals? Profit Shifting Activities on Real Investments
This paper investigates whether the size of multinationals? real investments in a high-tax country is affected by profit shifting activities. A simple theoretical analysis shows that tax rates abroad impact the cost of capital in the presence of profit shifting activities of multinational companies. As profit shifting opportunities constitute a competitive advantage, the respective size of investments should theoretically increase if profits can be shifted to a lower taxing country. An empirical analysis, based on a panel of German inbound investments, confirms a positive tax response of real investments with a decreasing tax rate at the foreign direct investor?s home country. Hence, the results suggest that the size of foreign investments in a high-tax country is positively affected by lower foreign taxation of shifted profits.
- Sprache
-
Englisch
- Erschienen in
-
Series: ZEW Discussion Papers ; No. 07-071
- Klassifikation
-
Wirtschaft
Fiscal Policies and Behavior of Economic Agents: Firm
Business Taxes and Subsidies including sales and value-added (VAT)
Multinational Firms; International Business
International Investment; Long-term Capital Movements
- Thema
-
Taxation
Multinationals
Profit Shifting
Investment Decisions
Firm-level Data
Gewinnverlagerung
Multinationales Unternehmen
Investition
Direktinvestition
Steuerbelastung
Deutschland
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Overesch, Michael
- Ereignis
-
Veröffentlichung
- (wer)
-
Zentrum für Europäische Wirtschaftsforschung (ZEW)
- (wo)
-
Mannheim
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Overesch, Michael
- Zentrum für Europäische Wirtschaftsforschung (ZEW)
Entstanden
- 2007
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