The Effect of Tax Treaties on Multinational Firms: New Evidence from Microdata
46 Pages Posted: 2 Feb 2011
Date Written: May 19, 2010
Abstract
This paper uses affiliate level data from Swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales. In line with previous results, we find little evidence for an effect of treaties on the level of total sales. We do, however, find that a tax treaty increases the probability of investment by a firm in a given country. In addition, we find that a treaty reduces exports to the parent but increases imports of intermediate inputs from the parent. This is consistent with treaties increasing the effective host tax. This suggests that tax treaties impact the behavior of multinationals along some dimensions but not along others.
Keywords: Tax Treaties, Multinational Firms, Foreign Direct Investment
JEL Classification: F21, F23, H25
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960-2000
By Zachary Elkins, Andrew T. Guzman, ...
-
Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960-2000
By Beth A. Simmons, Zachary Elkins, ...
-
Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960-2000
By Beth A. Simmons, Andrew T. Guzman, ...
-
Do Bilateral Investment Treaties Increase Foreign Direct Investment to Developing Countries?
By Eric Neumayer and Laura Spess
-
Do Double Taxation Treaties Increase Foreign Direct Investment to Developing Countries?
-
On Waves, Clusters, and Diffusion: A Conceptual Framework
By Beth A. Simmons and Zachary Elkins