The Effects of Taxation on Multinational Corporations

by Feldstein, Martin S.; Hines, James R., Jr.; Hubbard, R. Glenn

• ISBN13: 9780226240954
• ISBN10: 0226240959
• Format: Hardcover
• Copyright: 1995-09-01
• Publisher: Univ of Chicago Pr

Summary

The tax rules of the United States and other countries have intended and unintended effects on the operations of multinational corporations, influencing everything from the formation and allocation of capital to competitive strategies. The growing importance of international business has led economists to reconsider whether current systems of taxing international income are viable in a world of significant capital market integration and global commercial competition. In an attempt to quantify the effect of tax policy on international investment choices, this volume presents in-depth analyses of the interaction of international tax rules and the investment decisions of multinational enterprises. Ten papers assess the role played by multinational firms and their investment in the U.S. economy and the design of international tax rules for multinational investment; analyze channels through which international tax rules affect the costs of international business activities; and examine ways in which international tax rules affect financing decisions of multinational firms. As a group, the papers demonstrate that international tax rules have significant effects on firms' investment and other financing decisions.

Author Biography

James R. Hines is Richard A. Musgrave Collegiate Professor of Economics in the department of economics and Professor of Law at the University of Michigan Law School.

Martin Feldstein is professor of economics at Harvard University (on leave), and chairman of the Council of Economic Advisers.

Table of Contents

Preface

Introduction Martin Feldstein

Outward Direct Investment and the U.S. Economy Robert E. Lipsey Comment

The Effects of Outbound Foreign Direct Investment on the Domestic Capital Stock Martin Feldstein Comment

Why Is There Corporate Taxation in a Small Open Economy? The Role of Transfer Pricing and Income Shifting Roger H. Gordon

The Impact of International Tax Rules on the Cost of Capital Joosung Jun Comment

The Tax Sensitivity of Foreign Direct Investment: Evidence from Firm-Level Panel Data Jason G. Cummins

The Alternative Minimum Tax and the Behavior of Multinational Corporations Andrew B. Lyon, Gerald Silverstein. Comment

Accounting Standards, Information Flow, and Firm Investment Behavior Jason G. Cummins, Trevor S. Harris, Kevin A. Hassett. Comment

Taxes, Technology Transfer, and the R&D Activities of Multinational Firms James R. Hines, Jr Comment

Do Repatriation Taxes Matter? Evidence from the Tax Returns of U.S. Multinationals Rosanne Altshuler

Interest Allocation Rules, Financing Patterns, and the Operations of U.S. Multinationals Kenneth A. Froot

Contributors

Author Index

Subject Index

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