The Differential Effects of Bilateral Tax Treaties

• 成果类型: Article
• 署名作者: Blonigen, Bruce A.; Oldenski, Lindsay; Sly, Nicholas
• 署名单位: University of Oregon; National Bureau of Economic Research; Georgetown University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.6.2.1
• 发表日期: 2014
• 页码: 1-18
• 关键词: FOREIGN DIRECT-INVESTMENT; firm heterogeneity; performance; KNOWLEDGE; TRADE

摘要

Bilateral tax treaties (BTTs) are intended to promote foreign direct investment through double-taxation relief. Using BEA firm-level data, we find a positive effect of BTTs on FDI, which is larger for firms that use differentiated inputs. BTTs allow multinational firms to request assistance from treaty partners' governments if they have a grievance about how tax liabilities are determined. These provisions disproportionately benefit firms that use inputs for which an arm's-length price is difficult to observe, since allocation of earnings across countries is more complex. We find differential BTT effects for both sales by existing affiliates and entry of new affiliates.