Merger policy and tax competition: The role of foreign firm ownership

Haufler, Andreas und Schulte, Christian (2011): Merger policy and tax competition: The role of foreign firm ownership. In: International Tax and Public Finance, Bd. 18, Nr. 2: S. 121-145

Abstract

In many situations, governments have sector-specific tax and regulation policies at their disposal to influence the market outcome after a national or an international merger has taken place. In this paper we study the implications for merger policy when countries non-cooperatively deploy production-based taxes and firms may be partly owned by foreigners. We find that when foreign firm ownership is low in the pre-merger situation, non-cooperative tax policies are more efficient after a national merger, and smaller synergy effects are needed for this type of merger to be proposed and cleared. In contrast, cross-border mergers dominate when the degree of foreign firm ownership is high initially. These results suggest a link between increasing international portfolio diversification and the rising share of cross-border mergers.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Wirtschaftspolitik
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• Sprache: Englisch