Journal of Finance Vol. 64 No. 3 2009
International Taxation and the Direction and Volume of Cross-Border M&As
Abstract
We show that the parent-subsidiary structure of multinational firms created by cross-border mergers and acquisitions is affected by the prospect of international double taxation. Specifically, the likelihood of parent firm location in a country following a cross-border takeover is reduced by high international double taxation of foreign-source income. At the same time, countries with high international double taxation attract smaller numbers of parent firms. A unilateral elimination of worldwide taxation by the United States is simulated to increase the proportion of parent firms locating in the United States following cross-border mergers and acquisitions from 53% to 58%.
- DOI
- https://doi-org.simsrad.net.ocs.mq.edu.au/10.1111/j.1540-6261.2009.01463.x
- Volume
- 64
- Issue
- 3
- Pages
- 1217-1249
- Sources
- bibtex:phds-export.bib