Disponible en el Repositorio de la Biblioteca del IEF.

Bibliografía.

This paper investigates two closely related questions concerning the responses of Multinational Enterprise
(MNE) investment to corporate income taxation using a panel of unconsolidated subsidiary-level and
consolidated group-level data from the ORBIS database. First, the paper provides new evidence on the
heterogeneity of investment responses to taxation across multinational firms. This paper finds that profit
shifting opportunities, access to credit, and market power at the group level are associated with decreased
investment sensitivity to taxation among MNE subsidiaries. Second, a new empirical approach is used to
investigate how tax changes at the host jurisdiction level affect investment at the MNE group level and
whether there are propagation effects to foreign subsidiaries within the same MNE group. This paper finds
that tax rates in one jurisdiction in which an MNE is active are positively associated with investment in its
subsidiaries in other jurisdictions. This finding suggests that the well-documented negative relationship
between taxation and MNE investment within a host jurisdiction masks the MNE rebalancing the location
of its investment to other host jurisdictions in response to changes in cross-jurisdictional tax rate
differentials rather than purely decreasing its investment globally.