IMPORT COMPETITION AND CORPORATE TAX AVOIDANCE: EVIDENCE FROM THE CHINA SHOCK
| Autor: | Souillard, Baptiste |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Economie et finances publiques
Economie internationale Comptabilité et contrôle de gestion intangibles Tax Evasion F14 multinational firms Commerce international H25 Business Taxes and Subsidies including sales and value-added (VAT) H26 Economie financière import competition General [Economic Impacts of Globalization] Management profit shifting Manufacturing: General [Industry Studies] Country and Industry Studies of Trade F60 Economie industrielle Gestion financière Economie L60 Corporate tax avoidance Economie de l'entreprise |
| Zdroj: | ECARES Working Papers; 2020-30 |
| Popis: | This paper examines the effect of import competition on corporate tax avoidance. I exploit the rapid surge of China’s exports as a competition shock and balance sheets and income statements to measure tax avoidance of US-headquartered publicly listed manufacturing firms. The baseline results reveal that a 1 percentage point increase in the penetration ratio of US imports from China entails, on average, a 0.20 percentage point decrease in the effective tax rate. They are supported by a series of sensitivity tests and robust to using the US conferral of the Permanent Normal Trade Relations status on China in late 2000 as a quasi-natural experiment. Furthermore, the results are entirely driven by multinational firms. In response to the China shock, these firms invested in intangible assets, and these intangibles allowed them to shift more profits towards low-tax countries. These findings shed light on the determinants of corporate tax avoidance. More generally, they help understand the decline in the average effective tax rate of US publicly listed firms and the recent backlash against large firms and globalization. info:eu-repo/semantics/published |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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