Does Intangible Asset Intensity Increase Profit-Shifting Opportunities of Multinationals?

Roberto Crotti ()
Additional contact information
Roberto Crotti: IHEID, Graduate Institute of International and Development Studies, Geneva

No 02-2021, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper studies how intangible asset intensity affects multinationals' profitshifting behavior. Intangible assets reduce the cost of booking profits in low-tax jurisdictions, independently from where profits are generated. Consequently they can be instrumental to implementing tax-avoidance schemes. Using a large firm-level, parent-subsidiaries matched panel data set I test if multinationals characterized by high intangible asset intensity report higher profits in low-tax jurisdictions, respect to corporations with low intangible asset intensity. I find that, intangible asset intensity exacerbates multinationals' profit-shifting behavior. Splitting the sample between tech and non-tech companies, I find that, although tech companies leverage intangible asset intensity for profit-shifting more than the rest of the sample, there is no statistical difference between profit-shifting of tech companies with high intangibles intensity and non-tech companies with high intangibles intensity.

Keywords: intangible assets; international profit-shifting; corporate taxation (search for similar items in EconPapers)
JEL-codes: F23 H25 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2021-02-10
New Economics Papers: this item is included in nep-acc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP02-2021.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp02-2021

Access Statistics for this paper

More papers in IHEID Working Papers from Economics Section, The Graduate Institute of International Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dorina Dobre ().