Universität zu Köln

Heckemeyer, Jost H. and Overesch, Michael ORCID: 0000-0002-1531-0357 (2017). Multinationals' profit response to tax differentials: Effect size and shifting channels. The Canadian journal of economics, 50 (4). 965 - 995. HOBOKEN: WILEY. ISSN 1540-5982

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Abstract

This paper provides a quantitative review of the empirical literature on profit-shifting behaviour of multinational firms. We synthesize the evidence from 27 studies and find a substantial response of profit measures to international tax rate differentials. Accounting for confounding factors by means of meta-regressions, we predict a tax semi-elasticity of subsidiary pre-tax profits of about 0.8. Moreover, we disentangle the tax response by means of financial planning from the transfer pricing and licensing channel. Back-of-the-envelope calculations suggest that transfer pricing and licensing are the dominant profit-shifting channels.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Heckemeyer, Jost H. UNSPECIFIED UNSPECIFIED UNSPECIFIED Overesch, Michael UNSPECIFIED orcid.org/0000-0002-1531-0357 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-212700
DOI:	10.1111/caje.12283
Journal or Publication Title:	The Canadian journal of economics
Volume:	50
Number:	4
Page Range:	965 - 995
Date:	2017
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1540-5982
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	Management and auxiliary services
Uncontrolled Keywords:	Keywords Language CAPITAL-STRUCTURE CHOICE; CORPORATE-TAXATION; PUBLICATION BIAS; INCOME; AVOIDANCE; METAANALYSIS; INCENTIVES; INVESTMENT; EARNINGS; POLICY Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/21270