Taxes and the location of targets

Wiji Arulampalam, Michael P. Devereux, Federica Liberini

Research output: Contribution to journalArticle

Abstract

We use firm-level data to investigate the impact of taxes on the international location of targets in M&A, allowing for domestic acquisitions and heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system.
Original languageEnglish
Pages (from-to)161-178
Number of pages18
JournalJournal of Public Economics
Volume176
Early online date17 Jul 2019
DOIs
Publication statusPublished - 1 Aug 2019

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