Taxes and the Locations of Targets

Devereux, Michael, Arulampalam, Wiji and Liberini, Federica Taxes and the Locations of Targets. Journal of Public Economics. (Accepted)

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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 domestic acquisitions and 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: Article
Keywords: Multinational enterprises, cross-border expansion, target choice, corporation income tax, mixed logit.
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 21 Jun 2019 11:37
Last Modified: 21 Jun 2019 11:37
Funders: ESRC - ES/F037864/1, ETPF
URI: http://eureka.sbs.ox.ac.uk/id/eprint/7414

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