This paper introduces heterogeneous profit shifting costs induced by corrupt tax officials to the analysis of profit shifting of multinationals. Using a theoretically derived corruption weighted tax differential, we show that corruption increases profit shifting of European firms. We use our...

"Drawing together experts from a variety of backgrounds, this work explores the increasing shift away from formal based capitalism and evaluates through case studies how different states are responding to the challenges they face"--

We study the effects of “corruption distance,” defined as the difference in corruption levels between country pairs, on bilateral foreign direct investment (FDI). Using a “gravity” model and the Heckman (1979) two-stage framework on a data set of 45 countries from 1997 to 2007, we find...

We consider an argument that it might be helpful to combat poverty in developing countries indirectly by enlisting firms' help (as corporate citizens) in reducing corruption. It turns out that this argument crucially depends on a fair number of presmises, including (a) a common interest of firms...

We examine the effect of corruption on foreign direct investments. Our model shows that corruption may have different effects on investments aimed at selling to a local market, in comparison to investments aimed at selling from the corrupt market. Using Swedish firm-level data, we find that...

This paper focuses on how corruption affects an important internationalization behavior of firms: the extent of control - wholly owned subsidiary or equity participation - exercised by firms involved in cross-border mergers and acquisitions (M&A). Recently, scholars have recommended studying the...