Multinational firms mitigate tax competition

Johannes Becker and Nadine Riedel

Economics Letters, 2013, vol. 118, issue 2, 404-406

Abstract: An increase in the taxation of foreign affiliates reduces domestic investment, as has recently been empirically shown in Becker and Riedel (2012). This paper investigates the implication of this finding for tax competition. It is shown that an increase in the number of multinational firms (in contrast to purely national firms) may actually mitigate tax competition — counter to the popular opinion that multinational firms undermine the national capacity to levy source-based taxes.

Keywords: Multinational firms; Tax competition; Complementarities (search for similar items in EconPapers)
JEL-codes: F23 H25 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:2:p:404-406

DOI: 10.1016/j.econlet.2012.11.035

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