Relative factor endowments, foreign direct investment and tax planning of multinational firms: an empirical investigation into cross-country data
Andrzej Cieślik & Oleg Gurshev
What the paper says
This paper studies the impact of relative endowments of skilled labour and physical capital on the location choices of multinational firms (MNEs).We demonstrate potential methodological issues and possible solutions related to the identification of vertical MNE activity when using aggregate country-level data.To support our analysis, we introduce data matching and various assumptions with respect to the degree of profit shifting activities of MNEs that we apply to study unilateral inward foreign direct investment (FDI) across Estonia, Latvia, and Lithuania.Our choice of data is motivated by various legislation gaps, taxation specificities, and growing equity stocks in sectors related to profit shifting in the aforementioned economies.Ultimately, we highlight the importance of international tax differences and the growing discrepancy between real and reported cross-country FDI data.
3 citations
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.57 × 0.4 = 0.23 |
| M · momentum | 0.57 × 0.15 = 0.09 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.