Article ID Journal Published Year Pages File Type
962567 Journal of International Economics 2013 11 Pages PDF
Abstract
► We analyze taxation in a model where firms choose between outsourcing and FDI. ► With heterogeneous firms, the arm's length principle misvalues transfer prices. ► MNEs are able to shift profits abroad even if they fully comply with the tax code. ► Optimal organization provides a rationale for the empirically low tax burden of MNEs.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
Sorting into outsourcing: Are profits taxed at a gorilla's arm's length?
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