Profit-shifting and measured Productivity of Multinational Firms

Maffini, Giorgia and Mokkas, Socrates (2009) Profit-shifting and measured Productivity of Multinational Firms. Centre for Business Taxation WP 09/20.

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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 influence 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: Other Working Paper
Keywords: taxation; productivity; profit
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 23 Apr 2012 14:28
Last Modified: 15 Oct 2015 02:18
URI: http://eureka.sbs.ox.ac.uk/id/eprint/3290

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