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Relative factor endowments, foreign direct investment and tax planning of multinational firms: an empirical investigation into cross-country data.
- Source :
- Baltic Journal of Economics; Jun2024, Vol. 24 Issue 1, p30-57, 28p
- Publication Year :
- 2024
-
Abstract
- This paper studies the impact of relative endowments of skilled labour and physical capital on the location choices of multinational firms (MNEs). We demonstrate potential methodological issues and possible solutions related to the identification of vertical MNE activity when using aggregate country-level data. To support our analysis, we introduce data matching and various assumptions with respect to the degree of profit shifting activities of MNEs that we apply to study unilateral inward foreign direct investment (FDI) across Estonia, Latvia, and Lithuania. Our choice of data is motivated by various legislation gaps, taxation specificities, and growing equity stocks in sectors related to profit shifting in the aforementioned economies. Ultimately, we highlight the importance of international tax differences and the growing discrepancy between real and reported cross-country FDI data. [ABSTRACT FROM AUTHOR]
- Subjects :
- FOREIGN investments
DIRECT taxation
TAX planning
ENDOWMENTS
BUSINESS enterprises
Subjects
Details
- Language :
- English
- ISSN :
- 1406099X
- Volume :
- 24
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- Baltic Journal of Economics
- Publication Type :
- Academic Journal
- Accession number :
- 177561778
- Full Text :
- https://doi.org/10.1080/1406099X.2023.2296738