Organizational capacity and profit shifting

• 成果类型: Article
• 署名作者: Bilicka, Katarzyna; Scur, Daniela
• 署名单位: Utah System of Higher Education; Utah State University; National Bureau of Economic Research; Centre for Economic Policy Research - UK; Cornell University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2024.105179
• 发表日期: 2024
• 关键词: Profit shifting; multinational firm; Organizational capacity; Management practices

摘要

Good organizational capacity drives productivity and potential taxable profits, but may also enable multinationals (MNEs) to more efficiently re-allocate profits across tax jurisdictions, lowering actual taxable profits. We show that MNE subsidiaries with better organizational capacity report significantly lower profits in high- tax countries. This pattern is not present in low-tax countries. Further, responsiveness to corporate tax rate changes in terms of profit reporting is driven by firms with good organizational capacity. We show our results are consistent with profit-shifting behavior and rule out key alternative channels.1 1