Do multinational companies shift profits out of developing countries?: How data availability may hide the evidence

Caroline Schimanski

No wp-2018-52, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This study aims at providing causal evidence for tax-motivated profit-shifting out of developing countries, which, while often claimed to be the most affected, have been largely neglected in the literature. It uses global firm-level panel data from 2006-2015 and identifies profit-shifting through earnings shocks relative to comparable firms' profitability that are passed on to affiliates within multinational corporations located in lower taxed countries. Unlike previous studies on profit-shifting, the present study is thereby able to control for country-pair-year fixed effects.

Keywords: Tax avoidance; Profit shifting; Developing countries; Government tax revenue; Effective tax rate; Multinational firms (search for similar items in EconPapers)
Date: 2018
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