The determinants of tax haven FDI

Chris Jones; Yama Temouri

doi:10.1016/j.jwb.2015.09.001

The determinants of tax haven FDI

Chris Jones^*, Yama Temouri

^*Corresponding author for this work

Economics, Finance and Entrepreneurship

Research output: Contribution to journal › Article › peer-review

Abstract

This paper examines the determinants of a multinational enterprise’s (MNEs) decision to set up tax haven subsidiaries. We adapt the Firm-specific advantage–Country-specific advantage (FSA–CSA) framework and construct a number of empirically testable hypotheses. The analysis is based on a database covering 14,209 MNEs in twelve OECD countries. We find that the variety of capitalism of a MNEs home location and the level of technological intensity has a strong impact on this decision. We also find that the home country corporate tax rate has a minimal impact. This suggests that corporate tax liberalisation is unlikely to deter MNEs from undertaking this activity.

Original language	English
Pages (from-to)	237-250
Number of pages	14
Journal	Journal of World Business
Volume	51
Issue number	2
Early online date	26 Sept 2015
DOIs	https://doi.org/10.1016/j.jwb.2015.09.001
Publication status	Published - Feb 2016

Bibliographical note

Keywords

theory of FDI and the MNE
varieties of capitalism
tax havens
probit regression
corporate taxation

Access to Document

10.1016/j.jwb.2015.09.001Licence: CC BY-NC-ND 3.0

Determinants of tax haven FDI
© 2015 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Final published version, 601 KBLicence: CC BY-NC-ND 3.0

Cite this

@article{54ef1341f21c473a9c45947eb5b42d91,

title = "The determinants of tax haven FDI",

abstract = "This paper examines the determinants of a multinational enterprise{\textquoteright}s (MNEs) decision to set up tax haven subsidiaries. We adapt the Firm-specific advantage–Country-specific advantage (FSA–CSA) framework and construct a number of empirically testable hypotheses. The analysis is based on a database covering 14,209 MNEs in twelve OECD countries. We find that the variety of capitalism of a MNEs home location and the level of technological intensity has a strong impact on this decision. We also find that the home country corporate tax rate has a minimal impact. This suggests that corporate tax liberalisation is unlikely to deter MNEs from undertaking this activity.",

keywords = "theory of FDI and the MNE, varieties of capitalism, tax havens, probit regression, corporate taxation",

author = "Chris Jones and Yama Temouri",

note = "{\textcopyright} 2015 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).",

year = "2016",

month = feb,

doi = "10.1016/j.jwb.2015.09.001",

language = "English",

volume = "51",

pages = "237--250",

journal = "Journal of World Business",

issn = "1090-9516",

publisher = "Elsevier",

number = "2",

}

TY - JOUR

T1 - The determinants of tax haven FDI

AU - Jones, Chris

AU - Temouri, Yama

PY - 2016/2

Y1 - 2016/2

N2 - This paper examines the determinants of a multinational enterprise’s (MNEs) decision to set up tax haven subsidiaries. We adapt the Firm-specific advantage–Country-specific advantage (FSA–CSA) framework and construct a number of empirically testable hypotheses. The analysis is based on a database covering 14,209 MNEs in twelve OECD countries. We find that the variety of capitalism of a MNEs home location and the level of technological intensity has a strong impact on this decision. We also find that the home country corporate tax rate has a minimal impact. This suggests that corporate tax liberalisation is unlikely to deter MNEs from undertaking this activity.

AB - This paper examines the determinants of a multinational enterprise’s (MNEs) decision to set up tax haven subsidiaries. We adapt the Firm-specific advantage–Country-specific advantage (FSA–CSA) framework and construct a number of empirically testable hypotheses. The analysis is based on a database covering 14,209 MNEs in twelve OECD countries. We find that the variety of capitalism of a MNEs home location and the level of technological intensity has a strong impact on this decision. We also find that the home country corporate tax rate has a minimal impact. This suggests that corporate tax liberalisation is unlikely to deter MNEs from undertaking this activity.

KW - theory of FDI and the MNE

KW - varieties of capitalism

KW - tax havens

KW - probit regression

KW - corporate taxation

UR - http://www.scopus.com/inward/record.url?scp=84953354476&partnerID=8YFLogxK

U2 - 10.1016/j.jwb.2015.09.001

DO - 10.1016/j.jwb.2015.09.001

M3 - Article

AN - SCOPUS:84953354476

SN - 1090-9516

VL - 51

SP - 237

EP - 250

JO - Journal of World Business

JF - Journal of World Business

IS - 2

ER -

The determinants of tax haven FDI

Abstract

Bibliographical note

Keywords

Access to Document

Other files and links

Fingerprint

Cite this