Seminarium Katedry Innowacji i Rozwoju WNE UW [08.06.2022]

Serdecznie zapraszamy do wzięcia udziału w kolejnym seminarium Katedry Innowacji i Rozwoju Wydziału Nauk Ekonomicznych, podczas którego dr Katarzyna Bilicka (Utah State University, NBER, CESIfo) wygłosi referat pt. "Organizational Capacity and Profit Shifting".

Spotkanie odbędzie się w środę, 8 czerwca br. o godz. 12:00 w formie hybrydowej: na Wydziale Nauk Ekonomicznych, ul Długa 44/50 (sala A409) oraz za pośrednictwem platformy Zoom: https://us02web.zoom.us/j/85404098813

Omawiany artykuł jest dostępny na stronie: https://www.nber.org/papers/w29225

Abstract

This paper analyses the effect of a firm’s organizational capacity on the reported profitability of multinational enterprises (MNEs). Better organizational practices improve productivity and the potential taxable profits of firms. However, higher adoption of these practices may also enable more efficient allocation of profits across tax jurisdictions, lowering actual taxable profits. We present new evidence that MNE subsidiaries with better such practices, when located in high-tax countries, report significantly lower profits and have a higher incidence of bunching around zero returns on assets. We show these results are driven by patterns consistent with profit-shifting behavior. Further, using an event study design, we find that firms with better practices are more responsive to corporate tax rate changes. Our results suggest organizational capacity, especially monitoring-related practices, enables firms to engage in shifting profits away from their high-tax subsidiaries.