Perverse Intra-Firm Trade

Chander Kant

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows that linkages between domestic costs and direction of intra-firm trade break down when the multinational firms (MNFs) face tax rate differentials. Thus, in the context of MNFs, conclusions drawn on the assumption of equal or nonexistent tax rates cannot be assumed to extend to the general case of unequal tax rates. Further, saving on profit taxes itself can be a powerful motive for internalisation.

Keywords: Multinational firms; tax differentials; internalisation (search for similar items in EconPapers)
JEL-codes: F1 F23 (search for similar items in EconPapers)
Date: 1989-07
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Citations: View citations in EconPapers (1)

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