The effects of taxation on the location decision of multinational firms: M&A vs. Greenfield investments


Hebous, Shafik ; Ruf, Martin ; Weichenrieder, Alfons J.



URL: https://www.cesifo.org/en/publikationen/2010/worki...
Additional URL: https://www.academia.edu/24871947/The_Effects_of_T...
Document Type: Working paper
Year of publication: 2010
The title of a journal, publication series: CESifo Working Papers
Volume: 3076
Place of publication: München
Publishing house: Munich Society for the Promotion of Economic Research
ISSN: 1617-9595 , 2364‐1428
Publication language: English
Institution: Business School > ABWL u. Betriebswirtschaftliche Steuerlehre (Schreiber -2019)
Subject: 330 Economics
Classification: JEL: H25 , H73 , F23,
Keywords (English): FDI , corporate taxation , location , M&A, Greenfield
Abstract: In this study, we estimate the impacts of differences in international tax rates on the probability of choosing a location for an affiliate of a multinational firm. In particular, we distinguish between the tax sensitivity of Greenfield and M&A investments. Based on a novel firm-level dataset on German outbound FDI, we find evidence that location decisions of M&A investments are less sensitive to differences in tax rates than location decisions of Greenfield investments. According to our logit estimates, and after controlling for firm and country-specific characteristics, the tax elasticity for Greenfield investments is negative and in absolute value significantly larger than that associated with M&A investments. This finding is consistent with a (partial) capitalisation of taxes in the acquisition price when the FDI project takes the form of M&A.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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Hebous, Shafik ; Ruf, Martin ; Weichenrieder, Alfons J. (2010) The effects of taxation on the location decision of multinational firms: M&A vs. Greenfield investments. CESifo Working Papers München 3076 [Working paper]


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