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International Taxation and Multinational Firm Location Decisions

Salvador Barrios (), Harry Huizinga, Luc Laeven () and Gaëtan Nicodème ()

No 825, Working Papers from Oxford University Centre for Business Taxation

Abstract: Using a large international firm-level data set, we estimate separate effects of host and parent country taxation on the location decisions of multinational firms. Both types of taxation are estimated to have a negative impact on the location of new foreign subsidiaries. In fact, the impact of parent country taxation is estimated to be relatively large, possibly reflecting its international discriminatory nature. For the cross-section of multinational firms, we find that parent firms tend to be located in countries with a relatively low taxation of foreign-source income. Overall, our results show that parent-country taxation – despite the general possibility of deferral of taxation until income repatriation – is instrumental in shaping the structure of multinational enterprise.

Keywords: corporate taxation; dividend withholding taxation; location decisions (search for similar items in EconPapers)
JEL-codes: F23 G32 H25 R38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec
Date: 2008
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Related works:
Journal Article: International taxation and multinational firm location decisions (2012) Downloads
Working Paper: International taxation and multinational firm location decisions (2009) Downloads
Working Paper: International Taxation and Multinational Firm Location Decisions (2009) Downloads
Working Paper: International Taxation and Multinational Firm Location Decisions (2008) Downloads
Working Paper: International Taxation and Multinational Firm Location Decisions (2008) Downloads
Working Paper: International Taxation and Multinational Firm Location Decisions (2008) Downloads
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