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Taxes and the Location of Targets

Wiji Arulampalam (), Michael Devereux () and Federica Liberini ()

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: We use firm-level data to investigate the impact of taxes on the international location of targets in M & A, allowing for heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise ; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system.

Keywords: Multinational enterprises; cross-border expansion; target choice; corporation income tax; mixed logit (search for similar items in EconPapers)
JEL-codes: G34 H25 H32 C25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-knm, nep-pbe and nep-pub
Date: 2018
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https://warwick.ac.uk/fac/soc/economics/research/w ... /twerp_1168_wiji.pdf

Related works:
Working Paper: Taxes and the Location of Targets (2017) Downloads
Working Paper: Taxes and the Location of Targets (2017) Downloads
Working Paper: Taxes and the Location of Targets (2017) Downloads
Working Paper: Taxes and the Location of Targets (2012) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1168

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