The Effects of Taxation on Multinational Corporations
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The Effects of Taxation on Multinational Corporations
The tax rules of the United States and other countries have intended and unintended effects on the operations of multinational corporations, influencing everything from the formation and allocation of capital to competitive strategies. The growing importance of international business has led economists to reconsider whether current systems of taxing international income are viable in a world of significant capital market integration and global commercial competition.
In an attempt to quantify the effect of tax policy on international investment choices, this volume presents in-depth analyses of the interaction of international tax rules and the investment decisions of multinational enterprises. Ten papers assess the role played by multinational firms and their investment in the U.S. economy and the design of international tax rules for multinational investment; analyze channels through which international tax rules affect the costs of international business activities; and examine ways in which international tax rules affect financing decisions of multinational firms. As a group, the papers demonstrate that international tax rules have significant effects on firms’ investment and other financing decisions.
In an attempt to quantify the effect of tax policy on international investment choices, this volume presents in-depth analyses of the interaction of international tax rules and the investment decisions of multinational enterprises. Ten papers assess the role played by multinational firms and their investment in the U.S. economy and the design of international tax rules for multinational investment; analyze channels through which international tax rules affect the costs of international business activities; and examine ways in which international tax rules affect financing decisions of multinational firms. As a group, the papers demonstrate that international tax rules have significant effects on firms’ investment and other financing decisions.
334 pages | 6 line drawings, 71 tables | 6 x 9 | © 1995
National Bureau of Economic Research Project Report
Economics and Business: Business--Business Economics and Management Studies, Economics--Government Finance
Table of Contents
Preface
Introduction
Martin Feldstein, James R. Hines, Jr., R. Glenn Hubbard.
1: Outward Direct Investment and the U.S. Economy
Robert E. Lipsey
Comment: S. Lael Brainard
2: The Effects of Outbound Foreign Direct Investment on the Domestic Capital Stock
Martin Feldstein
Comment: Kenneth A. Froot
3: Why Is There Corporate Taxation in a Small Open Economy? The Role of Transfer Pricing and Income Shifting
Roger H. Gordon, Jeffrey K. MacKie-Mason.
Comment: T. Scott Newlon
4: The Impact of International Tax Rules on the Cost of Capital
Joosung Jun
Comment: Joel Slemrod
5: The Tax Sensitivity of Foreign Direct Investment: Evidence from Firm-Level Panel Data
Jason G. Cummins, R. Glenn Hubbard.
Comment: David G. Hartman
6: The Alternative Minimum Tax and the Behavior of Multinational Corporations
Andrew B. Lyon, Gerald Silverstein.
Comment: Alan J. Auerbach
7: Accounting Standards, Information Flow, and Firm Investment Behavior
Jason G. Cummins, Trevor S. Harris, Kevin A. Hassett.
Comment: G. Peter Wilson
8: Taxes, Technology Transfer, and the R&D Activities of Multinational Firms
James R. Hines, Jr
Comment: Adam B. Jaffe
9: Do Repatriation Taxes Matter? Evidence from the Tax Returns of U.S. Multinationals
Rosanne Altshuler, T. Scott Newlon, William C. Randolph.
Comment: William M. Gentry
10: Interest Allocation Rules, Financing Patterns, and the Operations of U.S. Multinationals
Kenneth A. Froot, James R. Hines, Jr.
Comment: Julie H. Collins
Contributors
Author Index
Subject Index
Introduction
Martin Feldstein, James R. Hines, Jr., R. Glenn Hubbard.
1: Outward Direct Investment and the U.S. Economy
Robert E. Lipsey
Comment: S. Lael Brainard
2: The Effects of Outbound Foreign Direct Investment on the Domestic Capital Stock
Martin Feldstein
Comment: Kenneth A. Froot
3: Why Is There Corporate Taxation in a Small Open Economy? The Role of Transfer Pricing and Income Shifting
Roger H. Gordon, Jeffrey K. MacKie-Mason.
Comment: T. Scott Newlon
4: The Impact of International Tax Rules on the Cost of Capital
Joosung Jun
Comment: Joel Slemrod
5: The Tax Sensitivity of Foreign Direct Investment: Evidence from Firm-Level Panel Data
Jason G. Cummins, R. Glenn Hubbard.
Comment: David G. Hartman
6: The Alternative Minimum Tax and the Behavior of Multinational Corporations
Andrew B. Lyon, Gerald Silverstein.
Comment: Alan J. Auerbach
7: Accounting Standards, Information Flow, and Firm Investment Behavior
Jason G. Cummins, Trevor S. Harris, Kevin A. Hassett.
Comment: G. Peter Wilson
8: Taxes, Technology Transfer, and the R&D Activities of Multinational Firms
James R. Hines, Jr
Comment: Adam B. Jaffe
9: Do Repatriation Taxes Matter? Evidence from the Tax Returns of U.S. Multinationals
Rosanne Altshuler, T. Scott Newlon, William C. Randolph.
Comment: William M. Gentry
10: Interest Allocation Rules, Financing Patterns, and the Operations of U.S. Multinationals
Kenneth A. Froot, James R. Hines, Jr.
Comment: Julie H. Collins
Contributors
Author Index
Subject Index