Taxes and Location of Targets

Arulampalam, Wiji, Devereux, Michael and Liberini, Federica (2017) Taxes and Location of Targets. Centre for Business Taxation Working Paper, Oxford, UK.

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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.

Item Type: Other Working Paper
Keywords: Multinational enterprises, cross-border expansion, target choice, corporation income tax, mixed logit.
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 03 May 2018 10:28
Last Modified: 03 Oct 2018 09:30
Funders: ESRC, ETPF
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6807

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