Corporate Taxation and International Financial Integration: U.S. evidence from a consolidated perspective

Agustín Bénétrix and Andre Sanchez Pacheco ()
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Andre Sanchez Pacheco: Department of Economics, Trinity College Dublin

Economic Papers from Trinity College Dublin, Economics Department

Abstract: We document a robust relation between corporate tax differentials and U.S. international financial integration (IFI). While this is the case for traditional IFI based on cross-border positions, the positive link also emerges for its larger consolidated-by-nationality version. The gap between these IFI measures, the key outcome variable in our analysis, exhibits a strong positive correlation with tax differentials too. This is in part due to consolidated assets of multinational enterprises being more strongly correlated with tax differentials than their cross-border counterpart. We interpret this as indirect evidence of U.S. multinationals taking advantage of tax differentials in ways that go beyond what is captured by traditional Balance of Payments procedures.

Keywords: International financial integration; financial globalisation; multinational enterprises; corporate taxation (search for similar items in EconPapers)
JEL-codes: F21 F23 F36 H87 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2021-05
New Economics Papers: this item is included in nep-acc, nep-int and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Corporate Taxation and International Financial Integration: U.S. evidence from a consolidated perspective (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduee:tep0321

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