Taxes and the location of targets
We use firm-level data to investigate the impact of taxes on the international location of targets in M&A, allowing for heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system.
Year of publication: |
2018-07
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Authors: | Arulampalam, Wiji ; Devereux, Michael ; Liberini, Federica |
Publisher: |
Centre for Business Taxation Working Paper |
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