This paper provides the first theoretical and empirical analysis of how taxation shapes the joint allocation of risk … risk to high-tax countries to maximize risk sharing with governments and all their profits to low-tax countries to minimize … expected tax payments. However, transfer pricing rules requiring risk to be compensated with a higher expected return introduce …

This paper provides the first theoretical and empirical analysis of how taxation shapes the joint allocation of risk … risk to high-tax countries to maximize risk sharing with governments and all their profits to low-tax countries to minimize … expected tax payments. However, transfer pricing rules requiring risk to be compensated with a higher expected return introduce …

attributes like tax losses. At the same time, profit shifting imposes risk to governments as it may reduce tax revenues. More and …