Gresik, Thomas; Schindler, Dirk; Schjelderup, Guttorm - CESifo - 2015
Multinational corporations can shift income into low-tax countries through transfer pricing and debt financing. While … internal debt, a number of developing countries do not. In this paper, we analyze the effect on FDI and host country welfare of … thin capitalization rules when multinationals can also shift income via transfer prices. We show that while permissive thin …