Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180241
Authors: 
Egger, Peter H.
Strecker, Nora M.
Zoller-Rydzek, Benedikt
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper 6979
Abstract: 
Bargaining power may explain the tax differences between multinational and national enterprises beyond MNEs’ profit shifting. Larger firms (mostly MNEs) are more valuable for tax authorities for various reasons. In threatening relocation, larger firms extract greater deductions, resulting in a regressive ETR schedule and lower ETRs for size-related reasons. MNEs face lower relocation costs than NEs, which enhances their bargaining position. Using French firm-level data and entropy balancing, we find that the regressivity of the French tax schedule reduces MNEs’ ETRs by 2.52 percentage points (size effect), while their relocation threat leads to a 3.58 percentage point reduction.
Subjects: 
profit taxation
multinational firms
entropy balancing
JEL: 
H25
H26
F23
C21
Document Type: 
Working Paper

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