Profit Shifting and Measured Productivity of Multinational Firms

Giorgia Maffini () and Socrates Mokkas ()
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Giorgia Maffini: Centre for Business Taxation, Said Business School, University of Oxford
Socrates Mokkas: Centre for Business Taxation, Said Business School, University of Oxford

No 920, Working Papers from Oxford University Centre for Business Taxation

Abstract: This paper examines the differences in total factor productivity (TFP) between multinationals and domestic firms before and after tax rate changes to investigate whether the host country corporate tax rate has a significant in fluence on the measured TFP advantage of multinational companies. Using a sample of approximately 16,000 European firms (1998-2004), we find that a 10 percentage points cut in the statutory corporate tax rate would increase multinationals' measured TFP by about 10 per cent relative to domestic firms, consistent with profit-shifting by multinationals. At the sample mean, this would imply a 44 per cent increase in the TFP advantage of multinationals.

Keywords: profit shifting; multinationals; productivity (search for similar items in EconPapers)
JEL-codes: D24 F23 H25 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (1)

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