The effect of tax and nontax country characteristics on the global equity supply chains of US multinationals

• 成果类型: Article
• 署名作者: Dyreng, Scott D.; Lindsey, Bradley P.; Markle, Kevin S.; Shackelford, Douglas A.
• 署名单位: Duke University; North Carolina State University; University of Iowa; University of North Carolina; University of North Carolina Chapel Hill; National Bureau of Economic Research
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2015.01.003
• 发表日期: 2015
• 关键词: FOREIGN DIRECT-INVESTMENT; management; decisions; location; taxation

摘要

We examine the global equity supply chains of U.S. multinationals to explore how tax and nontax country characteristics affect whether firms use foreign holding companies and where they locate them. We find that U.S. multinationals supply equity from headquarters to their foreign operating companies through foreign holding companies located in countries that lightly tax equity distributions. We also find that foreign holding companies tend to be located in countries with less corruption and investment risk than the countries in which the operating companies they own are located. In addition, we provide empirical evidence that the Netherlands, a well-known location for international tax planning, is a particularly popular site for foreign equity holding companies. Our findings contribute to a nascent literature that examines ownership chains in multinational companies and a larger literature on subsidiary location decisions for multinationals. The findings also provide empirical evidence that could be useful to governments in developed countries as they attempt to reform international tax policy. (C) 2015 Elsevier B.V. All rights reserved.