2024/05/08 by Barbara Bratta, Vera Santomartino, Paolo Acciari · 28 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Mathematics · #Base erosion and profit shifting #Business #Corporate Taxation and Avoidance #Corporate tax #Econometrics #Economics #Estimation #Finance #Fiscal Policy and Economic Growth #International economics #International taxation #Mathematics #Microeconomics #Multinational corporation #Profit (economics) #Public economics #Representativeness heuristic #Statistics #Tax avoidance #Tax reform #Taxation and Compliance Studies #Value-added tax
paper · doi:10.1086/729293
published in National Tax Journal 77(2), 349-380 (University of Chicago Press)
openalex publication_date 2024/05/08 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31
We analyze profit shifting carried out by multinational enterprises (MNEs) worldwide and estimate associated tax-revenue losses using firm-level data from mandatory country-by-country reporting. We show how the data set outperforms existing data sets, expand the analysis of the nonlinear response of profits to tax rates, and investigate nonlinear responses by MNE nationality and size. Our results suggest that the elasticity of profits with respect to corporate tax rates is eight times larger than the literature in lowest-tax jurisdictions and 60 percent lower among jurisdiction pairs with smaller tax rate differences. Results suggest fixed costs in profit shifting exist and differ by MNE headquarters.