Taxes and the location of targets

Wiji Arulampalam, Michael Devereux and Federica Liberini

Journal of Public Economics, 2019, vol. 176, issue C, 161-178

Abstract: We use firm-level data to investigate the impact of taxes on the international location of targets in M&A, allowing for domestic acquisitions and heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system.

Keywords: Multinational enterprises; Cross-border expansion; Target choice; Corporation income tax; Mixed logit (search for similar items in EconPapers)
JEL-codes: C25 G34 H25 H32 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Taxes and the Location of Targets (2017)
Working Paper: Taxes and the Location of Targets (2017)
Working Paper: Taxes and the Location of Targets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:176:y:2019:i:c:p:161-178

DOI: 10.1016/j.jpubeco.2019.05.005

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