Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions

Herger, Nils; Kotsogiannis, Christos; McCorriston, Steve

doi:10.1007/s10797-015-9351-6

Cited by 40 publications

(30 citation statements)

References 37 publications

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“…As prior literature has shown, the target country tax rate has a significant impact on target acquisition (see, e.g., Hebous et al (2011), Arulampalam et al (2017), Herger et al (2016)). Therefore, we start our analysis with T AX noPS , i.e., with the assumption of no profit shifting, where profits are taxed in the target country and not shifted to a tax haven subsidiary.…”

Section: Based Onmentioning

confidence: 98%

“…While a few studies investigate the effect of acquirers' taxation systems on M&A activity, they focus only on foreign dividends taxation. Further, the M&A studies by Hebous et al (2011), Arulampalam et al (2017) and Herger et al (2016) find that the corporate tax rate of a potential target has a negative effect on its actual acquisition; however, these studies focus only on the target corporate tax rate and, consequently, do not allow policy implications to be drawn on how to design the taxation system of the acquirer's residence country. Additionally, to our knowledge, our study is the first to analyze the impact of capital gains taxation at the acquirer level on M&A prices.…”

Section: Introductionmentioning

confidence: 99%

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International Taxation and M&A Prices

Hagen

Pönnighaus

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. http://ftp.zew.de/pub/zew-docs/dp/dp17040.pdf Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar. Terms of use: Documents inDis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract: We show that corporate taxation systems regarding foreign dividends and capital gains across 49 countries differ in many aspects, contradicting the requirements for capital ownership neutrality and indicating that ownership patterns are distorted. Consequently, a national tax policy maker may ask which taxation system improves the position of its multinational entreprises in bidding for foreign targets. To address this question, we develop a theoretical model on the impact of foreign dividends and capital gains taxation on cross-border M&A prices from the acquirer's perspective and theoretically compare different taxation systems. In a next step, we empirically validate our model in a regression analysis on a large cross-border M&A data set. Based on this analysis, we find that foreign dividends taxation rather than capital gains taxation impacts M&A prices. Finally, we provide tax policy suggestions. International Taxation and M&A Prices

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Section: Based Onmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

International Taxation and M&A Prices

Hagen

Pönnighaus

2017

SSRN Journal

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“…On the contrary, Devereux and Griffith (), Mutti and Grubert (), Overesch and Wamser (, ) and Herger et al. () accentuate discrete investment decisions of corporations. While Devereux and Griffith () emphasise the impact of profit taxes on discrete investment decisions of US multinationals engaged in France, Germany and/or the United Kingdom between 1980 and 1994, Mutti and Grubert () analyse the effects of host‐country taxation on discrete investment decisions of US multinationals taking into account 60 different countries in 1996.…”

Section: Previous Literaturementioning

confidence: 99%

“…In a similar vein, Herger et al. () focus on firm‐heterogeneity estimating the effects of various tax instruments on CBAs across 30 countries from 1999 to 2010.…”

Section: Previous Literaturementioning

confidence: 99%

On the measurement of investment types: Heterogeneity in corporate tax elasticities

Jungmann

Loretz

2018

World Economy

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“…Herger finds that tax elasticity varies depending on the FDI strategy (with vertical FDI being in general more responsive) [31]. Salihu and Faria focus on emerging economies and they show that there is a positive relationship between FDI and the avoidance of corporate tax [32,33].…”

Section: Tax Rates and Foreign Direct Investmentmentioning

confidence: 99%

International Aspects of Corporate Income Taxes and Associated Distortions

Birškytė¹,

Giriūnienė²

2018

Taxes and Taxation Trends

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The purpose of this chapter is to review the latest developments in corporate income tax (CIT) focusing on its international aspects and associated distortions. In this endeavor, the chapter draws on evidence provided by the leading tax experts as well as on the profound and rigorous research produced by academia. This chapter examines and synthesizes research on tax competition, relationship between tax rates and foreign direct investment (FDI), and tax avoidance as a result of differential tax regimes. Trends in the development of CIT are discerned using statistical data provided by OECD and European Commission. Numerous studies done on global, regional, and country-specific datasets support the premise that indeed tax competition for capital exists though the magnitude of effects varies. There is also enough evidence that tax avoidance and evasion through base erosion and profit shifting persist for some time and may be on the rise.

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Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions

Cited by 40 publications

References 37 publications

International Taxation and M&A Prices

International Taxation and M&A Prices

On the measurement of investment types: Heterogeneity in corporate tax elasticities

International Aspects of Corporate Income Taxes and Associated Distortions

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