In this paper, I investigate the influence of tax incentives on the financial structures of mergers and acquisitions (M&A) conducted by multinational entities (MNE). Previous research has already found evidence for tax avoidance by debt shifting. I analyze the importance of locating debt at...

Under a worldwide tax system, firms pay taxes on their domestic income and repatriated foreign income, whereas under a territorial tax system repatriated foreign income is exempt from taxation. We examine whether worldwide tax systems reduce the incentives of multinational corporations to engage...

This study finds that stock return volatility is higher during periods of high tax policy uncertainty (TPU), even after controlling for other sources of general macroeconomic uncertainty. Further, we find that the relation between TPU and stock return volatility is more pronounced where firms...

We analyze the optimal tax choices of a revenue-maximizing government that levies taxes from firms of which the true degree of mobility is ex ante unknown. Differential tax treatment of immobile and mobile firms is ruled out, but the government may learn from the firms' location responses to...

Many multinational firms (MNEs) pay low or no corporation tax in high-tax countries because they shift taxable income to tax havens. We incorporate nonconvex costs of profit shifting and unobserved heterogeneity in profit-shifting ability in the MNEs’ value maximization problem to study...

Petroleum administration can be regarded as a principal-agent problem. The government allocates exploration and production rights to petroleum companies on behalf of the population. The government is the principal and the companies are agents. With the aim of capturing revenue for the state, the...

A job applicant’s investment in education can function as a signal of her high productivity under certain circumstances. Might an entrepreneur’s choice to opt-in to a tax regime act in much the same way, as a signal of her business’s high quality? This paper explores the counter-intuitive...

The paper examines the role of commitment to future tax policy as an explanation for tax incentives for foreign direct investment that take the form of rates that increase over time. Both commitment and non-commitment to future tax rates are analyzed using a two-period model with investment...

We study how differential taxation of personal and corporate income impacts the corporate share of new firms for 31 countries over 1998-2018. We build a novel database that identifies the tax treatment of partnerships either as corporations or as passthrough entities. We find a tax elasticity of...

Acting in the interest of their residents, within limits imposed by Federal statute and by the Constitution, states have incentives to impose taxes on the profits of corporations owned by nonresidents. This paper presents a model within which a state, using an apportionment formula that includes...