International taxation and the organizational form of foreign direct investment
Bibliographic Data
| ID | 21410152 |
|---|---|
| Authors | Harald J Amberger, Harald Amberger (0000-0003-4499-0512, Vienna University of Economics and Business, corresponding author), Saskia Kohlhase (0000-0002-7763-8446, Erasmus University Rotterdam) |
| Year | 2023 |
| Volume | 54 |
| Issue | 8 |
| Pages | 1529-1561 |
| Publication date | 2023-10-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of International Business Studies (JOURNAL) |
| Journal identifiers | ISSN: 0047-2506 • E-ISSN: 1478-6990 |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1057/s41267-023-00614-1 |
| OpenAlex | W4381926579 |
| Language | EN |
| Citations received | 2 |
| References cited | 52 |
We investigate the relation between international taxation and the organizational form of foreign direct investment (FDI). Using micro-level data on inbound FDI relations in Germany, we find that a higher tax burden on income earned in a corporate subsidiary increases the probability that a multinational corporation (MNC) conducts foreign investment through a non-corporate flow-through. This effect is economically meaningful and varies with the relative importance of tax-motivated income shifting, a subsidiary’s non-tax benefits of limited liability and legal independence, and an MNC’s local knowledge. Moreover, we examine potential real effects of organizational form choices and document that affiliates established as flow-throughs exhibit a lower loss propensity and are less profitable than affiliates established as subsidiaries. Taken together, our findings inform policy makers about the potential response of MNCs to tax-law changes and suggest that the chosen organizational form can shape the future characteristics of investments abroad
Business · Corporate Tax · Corporation · Double taxation · Economics · Foreign direct investment · Independence (probability theory) · International business · International economics · Macroeconomics · Management · Monetary economics · Multinational corporation · Public economics · Subsidiary · Tax avoidance · Corporate Finance and Governance · Corporate Taxation and Avoidance · Finance · Taxation and Compliance Studies
| Citations per year | 2 |
|---|---|
| Citation span | 2025 - 2026 (2) |
| Highly cited | No |