Profit Shifting in a Globalized World

Dharmapala, Dhammika

Profit Shifting in a Globalized World

AEA Papers and Proceedings, 2019, vol. 109, 488-92

Abstract: This paper briefly reviews the measurement of the magnitude of profit shifting by multinational firms. Highlighting differences between estimates using microeconomic and macroeconomic approaches, it sketches a conceptual framework that can help explain these divergent estimates. In particular, these approaches arguably differ in their conceptualization of the boundary between tax avoidance and behavioral responses to taxes. The paper also discusses the future of profit shifting, drawing on a data set that codes anti-avoidance measures undertaken by OECD countries over the period of 2000-2014. Governments have significantly strengthened these rules over this period, despite collective action problems that potentially inhibit their implementation.

JEL-codes: F23 H25 H26 H32 L25 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pandp.20191043
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Citations: View citations in EconPapers (17)

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