Logo Logo
Hilfe
Hilfe
Switch Language to English

Dischinger, Matthias (August 2008): Profit Shifting by Multinationals and the Ownership Share: Evidence from European Micro Data. Münchener Wirtschaftswissenschaftliche Beiträge (VWL) 2008-17 [PDF, 234kB]

Dies ist die neueste Version des Dokumentes.

[thumbnail of dischinger_2008_MunichDPupdate.pdf]
Vorschau
Download (234kB)

Abstract

We provide indirect empirical evidence of profit shifting behavior by multinational enterprises (MNEs) employing a panel study for the years 1995 to 2005, while controlling for unobservable fixed firm effects. We use a large micro database of European MNEs which includes detailed accounting and ownership information. Our results show a strongly negative relationship between an affiliated company's statutory corporate tax rate difference to its foreign parent firm and the affiliate's gross profits. Quantitatively, a 10 percentage points decrease in the tax rate of the affiliate (relative to the parent) increases its pre-tax profitability by 7%, other things being equal. Various robustness checks support this profit shifting inference. Furthermore, we provide evidence that a higher parent's ownership share of its subsidiary leads to intensified shifting activities between these two affiliates.

Alle Versionen dieses Dokumentes

Dokument bearbeiten Dokument bearbeiten