Following the release of the Panama Papers and the Paradise Papers, there has been renewed research into profit shifting by multinational firms. This column utilises a novel dataset to show that well-managed subsidiaries, independently of their headquarters, allow a company to be more responsive to tax changes, shifting more profits from high-tax to low-tax jurisdictions. The authors argue this is because better managed subsidiaries allow more effective tax planning by headquaters and are better placed to implement HQ directives.
Katarzyna Bilicka and Daniela Scur
4 September 2024
Vox EU
https://cepr.org/voxeu/columns/good-management-practices-are-great-productivity-well-profit-shifting
This work is published under POID and the CEP's Growth programme.
This publication comes under the following CEP theme: Management practices and productivity