Details

Autor(en) / Beteiligte

• Ντελής, Φώτιος
• Delis, Fotis

Titel

Essays on Profit Shifting Behavior of Multinational Enterprises

Ort / Verlag

ProQuest Dissertations & Theses

Erscheinungsjahr

2022

Link zum Volltext

• ProQuest

Quelle

ProQuest Dissertations & Theses A&I

Beschreibungen/Notizen

• Tax-motivated profit shifting refers to the tax planning strategies of multinational enterprises (MNEs) to "shift" profits from the parent or subsidiaries in high-tax jurisdictions to subsidiaries in low-tax jurisdictions, with the aim to increase their net income. Although the relevant literature has produced many insights, especially on how to generally identify the potency of profit shifting, we do not have a comprehensive global dataset on profit-shifting intensity at the firm-year level. The present thesis introduces such a dataset and explores potential determinants of profit shifting.Specifically, it studies the global variation in profit shifting at the firm-year level. The novelty lies in re-estimating existing models of profit shifting using nonparametric estimation techniques that allow obtaining subsidiary-year estimates of profit shifting. The aim is to offer this dataset to international institutions, policy makers, and the academia to get better insights at the very disaggregated level of the effects of profit-shifting on economic activity. With this approach, also important determinants and outcomes of profit shifting can be studied such as democracy and institutional quality, corporate governance, intangible assets and other financial characteristics, which have not been adequately addressed so far in the literature.In this thesis, four novel subsidiary-year and country-year indices of profit shifting are presented, for a maximum of 95 countries over 2009-2017. Profit shifting differs a lot across countries and sectors, but with similar time trends. Also, it is conditionally negatively correlated with democratic and transparent institutions, as well as with financially developed and sound banking systems and it displays a high intensity among fossil fuel firms and leveraged firms.Further this thesis tries to establish three causal relationships between profit shifting and democracy, profit shifting and intangible assets and profit shifting and corporate governance, respectively. More specifically, it studies the effect of constitutional democratization and the subsequent evolution of the host country’s institutions on profit-shifting strategies among firms, using the new subsidiary-year measure of profit-shifting.Further, it studies the role of firms' intangible assets on profit shifting and how this channel is affected by institutional quality. Finally, it examines tax-motivated profit shifting as the outcome of corporate governance characteristics in multinational enterprises (MNEs), such as audit committee size and experience, as well as CEO duality.