Profit Shifting and Measured Productivity of Multinational Firms

• Autores: Giorgia Maffini, Socrates Mokkas
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 73, Nº. 1, 2011, págs. 1-20
• Idioma: inglés
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• Resumen

  • This article examines the differences in total factor productivity (TFP) between multinationals and domestic firms before and after tax rate changes. The aim is to investigate whether the host country corporate tax rate has a significant influence on the measured TFP advantage of multinational companies. Using a sample of approximately 16,000 European manufacturing firms (1998–2004), we find that a cut by 10 percentage points in the statutory corporate tax rate would increase multinationals’ measured TFP by about 10% relative to domestic firms, consistent with profit shifting by multinationals. At the sample mean, this would imply a 44% increase in the TFP advantage of multinationals.