Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198571 
Year of Publication: 
2018
Series/Report no.: 
UCD Centre for Economic Research Working Paper Series No. WP18/18
Publisher: 
University College Dublin, UCD School of Economics, Dublin
Abstract: 
Tax arbitrage is often cited as a potential motive for the substantial growth and complexity of market based finance. Tax treaties are an important feature of the international tax system and can be used to reduce the tax burden on cross-border capital flows. Using an EU firm-level dataset and a number of alternative tax treaty measures, this paper investigates the importance of tax treaties on the investment decisions of a large sample of non-bank financial institutions. The novel dataset includes conduits such as special purpose entities which are often used to channel cross-border investments. Our results show that tax treaties influence the extensive margin of non-bank financial FDI with conduit related investments particularly sensitive to international taxation.
Subjects: 
Tax treaties
market-based finance
shadow banking system
conditional logit model
mixed logit model
nested logit model
JEL: 
F23
F65
G23
G32
Document Type: 
Working Paper

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