Objective: The objective of the article is to present in a didactic and concise way the fundamental concepts of item response theory (IRT) and its possible application in the economic sciences and show the bias problem that occurred when estimating a latent variable such as financial capital in...

This article analyzes profit taxation according to the arm's length principle in a new model where heterogeneous firms sort into foreign outsourcing. We show that multinational firms are able to shift profits abroad even if they fully comply with the tax code. This is because, in equilibrium,...

This note identifies profit shifting in response to cross-countrydifferences in corporate tax rates as a source of productivitymismeasurement. To quantify the magnitude of mismeasurement, theprofit-shifting effect is isolated from other possible effects ofcorporatetax rates changes on real...

This paper analyzes transfer pricing incentives under a destination-based and an origin-based VAT system. While a switch to the origin-based VAT may moderate or reinforce the incentive for transfer pricing induced by income tax differentials, we show that in the case of the EU this switch tends...