International Taxation and Multinational Firm Location Decisions

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

No 16, Taxation Papers from Directorate General Taxation and Customs Union, European Commission

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: European Union; corporate taxation; dividend withholding taxation; location decisions. (search for similar items in EconPapers)
JEL-codes: H25 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2009-04, Revised 2009-04
New Economics Papers: this item is included in nep-eec and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Journal of Public Economics, 2012, 96(11), pp. 946-958

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Related works:
Journal Article: International taxation and multinational firm location decisions (2012)
Working Paper: International taxation and multinational firm location decisions (2009)
Working Paper: International Taxation and Multinational Firm Location Decisions (2008)
Working Paper: International Taxation and Multinational Firm Location Decisions (2008)
Working Paper: International Taxation and Multinational Firm Location Decisions (2008)
Working Paper: International Taxation and Multinational Firm Location Decisions (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tax:taxpap:0016

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