The 2017 Tax Cut and Jobs Act reduced the US corporate tax rate and introduced provisions to curb profit shifting. We combine survey data, tax data, and firm financial statements to study the evolution of the geographical allocation of US firms' profits after the reform. The share of profits...

In 2009, Japan began to exempt dividends paid by Japanese-owned foreign subsidiaries to their parent firms from home-country taxation. This tax reform switched Japan's corporate tax system to a territorial tax system that exempts foreign income from home-country taxation. In this paper, I...

We use data from the U.S. Treasury corporate tax files for 1984 and 1992 to address two related questions concerning the investment decisions of U.S. multinational corporations. First, how sensitive are investment location decisions to tax rate differences across countries? And second, have...

We estimate a dynamic model, featuring agency conflicts and a stochastic tax reform arrival, to evaluate how the change from a worldwide to territorial tax system, enacted under the TCJA, affects foreign investment. Although a worldwide system imposes a higher tax liability on foreign income, we...

This study examines the effect of the 2017 Tax Cuts and Jobs Act (TCJA) on capital investment, labor investment, and the productivity of foreign subsidiaries of U.S. multinational corporations (MNCs). Proponents of the TCJA argue it decreased foreign investment by leveling the playing field...

How sensitive is inward foreign direct investment (FDI) from the United States (US) to developing Asia to corporate tax rates? This is a relevant question given the sweeping US tax bill effective in 2018, which provided incentives for US corporations abroad to repatriate profits. Using panel...

In 2015, the Irish government announced the closure of the Double Irish; one of the largest tax loopholes used by U.S. multinational companies, giving existing users until 2020 to comply. Using U.S. administrative corporate tax data, I provide novel estimates on profit shifted back to the United...

Using unique transaction-level microdata, this paper documents profit-shifting behavior by U.S. multinational firms via the strategic transfer pricing of intra-firm trade. A simple model reveals how differences in tax rates, both the corporate tax rates across countries and the dividend...

Corporate income tax law in OECD countries requires multinational enterprises (MNEs) to set their transfer prices according to the arm's length standard. In 1990, the US government introduced a transfer pricing penalty for cases where MNEs deviated substantially from this standard. Most OECD...

We investigate whether U.S. multinational corporations shift income overseas to the point of recording domestic pretax earnings around zero. We label firms with near-zero domestic earnings “Small” firms, and present evidence that Small captures targeted income shifting that minimizes...