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

Cite this

Taxes and the location of targets. / Arulampalam, Wiji; Devereux, Michael P.; Liberini, Federica.

In: Journal of Public Economics, Vol. 176, 01.08.2019, p. 161-178.

Research output: Contribution to journalArticle

Arulampalam, Wiji ; Devereux, Michael P. ; Liberini, Federica. / Taxes and the location of targets. In: Journal of Public Economics. 2019 ; Vol. 176. pp. 161-178.
@article{f02f5a52c07b45f2be174fd4365be3e1,
title = "Taxes and the location of targets",
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.",
author = "Wiji Arulampalam and Devereux, {Michael P.} and Federica Liberini",
year = "2019",
month = "8",
day = "1",
doi = "10.1016/j.jpubeco.2019.05.005",
language = "English",
volume = "176",
pages = "161--178",
journal = "Journal of Public Economics",
issn = "0047-2727",
publisher = "Elsevier",

}

TY - JOUR

T1 - Taxes and the location of targets

AU - Arulampalam, Wiji

AU - Devereux, Michael P.

AU - Liberini, Federica

PY - 2019/8/1

Y1 - 2019/8/1

N2 - 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.

AB - 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.

U2 - 10.1016/j.jpubeco.2019.05.005

DO - 10.1016/j.jpubeco.2019.05.005

M3 - Article

VL - 176

SP - 161

EP - 178

JO - Journal of Public Economics

JF - Journal of Public Economics

SN - 0047-2727

ER -