Abstract
This paper examines the determinants of a multinational enterprise's (MNEs) decision to set up tax haven subsidiaries. We adapt the firm-specific advantage-country-specific advantage (FSA-CSA) framework and construct a number of empirically testable hypotheses. The analysis is based on a database covering 14,209 MNEs in twelve OECD countries. We find that the variety of capitalism of a MNEs home location and the level of technological intensity has a strong impact on this decision. We also find that the home country corporate tax rate has a minimal impact. This suggests that corporate tax liberalisation is unlikely to deter MNEs from undertaking this activity.
Original language | British English |
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Pages (from-to) | 237-250 |
Number of pages | 14 |
Journal | Journal of World Business |
Volume | 51 |
Issue number | 2 |
DOIs | |
State | Published - 1 Feb 2016 |
Keywords
- Corporate taxation
- Probit regression
- Tax havens
- Theory of FDI and the MNE
- Varieties of capitalism