OECD Taxation Working Papers

Abstract

OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works. Comments on Working Papers are welcomed, and may be sent to the Centre for Tax Policy and Administration, OECD,

Corporate taxation and investment of multinational firms

“…Results also hold when estimating a dynamic panel data model, using a difference GMM estimator following the approach proposed by Arellano and Bond (1991[33]). 27 This estimation confirms the negative short-term effect of domestic EMTR on firm investment, with a coefficient estimated at around -0.14 and statistically significant at the 5% level (see Annex D). The advantage of this model is that it also allows for the consideration of the dynamics of investment, taking into account adjustment costs.…”

“…Going one step further, 26 Lags beyond two years have not been found to be significant, possibly because of the relatively short time dimension of the sample considered. 27 Difference GMM is used rather than system GMM as the estimation shows no sign of weak instrument problem due to highly persistent data (Bond, Hoeffler and Temple, 2001[52]). 28 There are reasons, including the presence of adjustment costs, why the current level of investment may depend on previous investment.…”

“…18 These entities may, however, have their ultimate parent headquartered in any country worldwide, and given that the coverage of ORBIS for consolidated account data is good worldwide, it is possible to observe the profitability of MNE groups even if the ultimate parent is not located in a country included in the entity-level sample. 27. Although the sample at the entity-level is restricted to 17mostly Europeancountries, the results are likely to be applicable to other countries given that the model estimates firm-level effects of corporate 16 In order to maximise the number of observations, the difference GMM results presented in this paper rely on forward orthogonal deviations transform instead of first differencing, as proposed by Arellano and Bover (1995[46]).…”

Why are there (almost) no randomised controlled trial-based evaluations of business support programmes?

“…The high cost of R&D tax credits, combined with the evidence of their marginal impacts, has focused attention on where their impact is greatest. A review of the literature suggests that R&D tax incentives be targeted at firms that are more highly innovative and industry sectors with a higher propensity to conduct R&D (Palazzi, 2011).…”

Efficiency and Sustainability in Teamwork: The Role of Entry Costs

“…Take, for example, the Kyoto Protocol, which was devised as an attempt to have industrialized countries commit to stabilizing greenhouse emissions by punishing parties that exceed the assigned amount of emissions [4]. Environmental taxes can help to manage environmental problems by internalizing environmental costs and creating economic incentives for the public and businesses to promote ecologically sustainable activities [5].…”