Profit-shifting and Measured Productivity of Multinational Firms

Maffini, Giorgia and Mokkas, Socrates (2011) Profit-shifting and Measured Productivity of Multinational Firms. Oxford Bulletin of Economics and Statistics, 73 (1). pp. 1-20.

Abstract

This paper examines the differences in total factor productivity (TFP) between multinationals and domestic firms before and after tax rate changes to investigate whether the host country corporate tax rate has a significant in fluence on the measured TFP advantage of multinational companies. Using a sample of approximately 16,000 European firms (1998-2004), we find that a 10 percentage points cut in the statutory corporate tax rate would increase multinationals' measured TFP by about 10 per cent relative to domestic firms, consistent with profit-shifting by multinationals. At the sample mean, this would imply a 44 per cent increase in the TFP advantage of multinationals.

Item Type: Article
Keywords: taxation; productivity; profit
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 04 Nov 2011 14:27
Last Modified: 23 Oct 2015 14:06
URI: http://eureka.sbs.ox.ac.uk/id/eprint/1075

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