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  1. Profit-shifting behaviour of emerging multinationals from India
    Author: Das, Khanindra Ch.
    Published: February 2022
    Publisher:  United Nations University World Institute for Development Economics Research, Helsinki, Finland

    This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial... more

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    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
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    DS 248
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    This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate on profitability is examined using a fixed-effects model for the period 2010-19. In the case of subsidiaries established via OFCs, a negative relationship between corporate tax rate and profitability is found, indicating profit-shifting behaviour. However, a disaggregated investigation by characteristics of parent firms reveals that the negative relationship holds primarily for via-OFC subsidiaries that belong to multinational firms with limited transactions of intangible assets, lower export intensity, and limited dependence on external commercial borrowing. The evidence of profit shifting is not all pervasive. However, in the presence of these transaction channels, multinational firms establish better control over intra-firm resources, which enables the transfer of resources within the multinational firm when the network of subsidiaries is connected through the OFC. The results are robust to the inclusion of economic and institutional factors pertaining to the host country.

     
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    Source: Union catalogues
    Language: English
    Media type: Ebook
    Format: Online
    ISBN: 9789292671525
    Other identifier:
    hdl: 10419/259377
    Series: WIDER working paper ; 2022, 21
    Subjects: corporate tax; multinational firms; offshore financial centre; profit shifting; panel data; tax haven
    Scope: 1 Online-Ressource (circa 24 Seiten), Illustrationen
  2. Pennies from haven
    wages and profit shifting
    Author: Alstadsæter, Annette; Bjørkheim, Julie Brun; Davies, Ronald B.; Scheuerer, Johannes
    Published: February 2022
    Publisher:  CESifo, Center for Economic Studies & Ifo Institute, Munich, Germany

    Increasing attention has been given to the fact that some multinational enterprises shift income to tax haven countries, an activity that generates inequality in corporate taxation. Here, we examine how profit shifting relates to wage inequality.... more

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    Signature:
    DS 63
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    No inter-library loan

     

    Increasing attention has been given to the fact that some multinational enterprises shift income to tax haven countries, an activity that generates inequality in corporate taxation. Here, we examine how profit shifting relates to wage inequality. Using rich matched employer-employee data from Norway, we find that profit-shifting firms pay higher wages, particularly among service firms where the wage premium is approximately 2%. Furthermore, this average effect masks significant within-firm heterogeneity with high-skill occupations – and managers in particular – earning higher shifting wage premiums. CEOs particularly gain, with their wages rising nearly 10%. These results thus suggest that profit shifting by multinationals meaningfully contributes to wage inequality, both between and within firms. Finally, our back-of-the-envelope calculations suggest these higher wages would generate additional income tax revenues which would offset around 3% of the fall in Norway’s corporate tax revenues due to profit shifting.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/252107
    Series: CESifo working paper ; no. 9590 (2022)
    Subjects: profit shifting; tax haven; tax avoidance; multinational firms; wage distribution; inequality
    Scope: 1 Online-Ressource (circa 44 Seiten), Illustrationen
  3. FDI-led growth models
    Sraffian supermultiplier models of export platforms and tax havens
    Author: Woodgate, Ryan
    Published: December 2022
    Publisher:  Berlin School of Economics and Law, Institute for International Political Economy Berlin, Berlin

    This paper develops two Sraffian supermultiplier models of two different kinds of economies that are dependent upon foreign direct investment (FDI): the "export platform FDI-led" growth model and the "tax haven FDI-led" growth model. The former is... more

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    DS 369
    Inter-library loan:
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    This paper develops two Sraffian supermultiplier models of two different kinds of economies that are dependent upon foreign direct investment (FDI): the "export platform FDI-led" growth model and the "tax haven FDI-led" growth model. The former is driven by the growth of the exports of foreign-owned firms and is associated with greenfield FDI inflows, whereas the latter is driven by the growth of profits booked at foreign-owned shell companies that are partly absorbed through taxation and is associated with intangible FDI inflows. The two models achieve demand, output, and income growth via fundamentally different channels yet appear similarly export-led given how profit shifting artificially inflates the net exports of tax havens. Based on these models, a set of empirical indicators are proposed to differentiate exportplatform from tax haven economies. In contrast to Bohle/Regan (2021), who characterise output growth in both Hungary and Ireland as being led by the exports of foreign-owned firms, the model and indicators proposed here support the hypothesis that Ireland is closer to the tax haven FDI-led growth model.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/266642
    Series: Working paper / Institute for International Political Economy Berlin ; no. 198 (2022)
    Subjects: Foreign direct investment; growth model; multinational corporation; tax haven
    Scope: 1 Online-Ressource (circa 24 Seiten), Illustrationen