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International Taxation and Multinational Activity

Because the actions of multinational corporations have a clear and direct effect on the flow of capital throughout the world, how and why these firms behave the way they do is a major issue for national governments and their policymakers. With an unprecedented ability to adjust the scale, character, and location of their global operations, international corporations have become increasingly sensitive to the kind and degree of tax obligations imposed on them by both host and home countries. Tax rules affect the volume of foreign direct investment, corporate borrowing, transfer pricing, dividend and royalty payments, and research and development. National governments that tax the profits of international firms face important challenges in designing tax policies to attract them. This collection examines the global ramifications of tax policies, offering up-to-date, theoretically innovative, and empirically sound perspectives on a problem of immense significance to future economic growth around the globe.

288 pages | 12 line drawings, 65 tables | 6 x 9 | © 2001

National Bureau of Economic Research Conference Report

Economics and Business: Economics--General Theory and Principles

Table of Contents

Introduction—James R. Hines Jr.
1. Has U.S. Government Investment Abroad Become More Sensitive to Tax Rates?
Rosanne Altshuler, Harry Grubert, and T. Scott Newlon
Comment: Jack M. Mintz
2. Tax Sparing and Direct Investment in Developing Countries
Comment: Timothy J. Goodspeed
3. Does Corruption Relieve Foreign Investors of the Burden of Taxation?
Shang-Jin Wei
Comment: Bernard Yeung
4. Transaction Type and the Effects of Taxes on the Distribution of Foreign Direct Investment in the United States
Deborah L. Swenson
Comment: William C. Randolph
5. Tax Planning by Companies and Tax Competition by Governments: Is There Evidence of Changes in Behavior?
Harry Grubert
Comment: Joel Slemrod
6. Valuing Deferral: The Effect of Permanently Reinvested Foreign Earning on Stock Prices
Julie H. Collins, John R. M. Hand, and Douglas A. Shackelford
Comment: Kevin Hassett
7. The Impact of Transfer Pricing on Intrafirm Trade
Kimberly A. Clausing
Comment: Deen Kemsley
8. International Taxation and the Location of Inventive Activity
James R. Hines Jr. and Adam B. Jaffe
Comment: Austan Goolsbee
9. Taxation and the Sources of Growth: Estimates from U.S. Multinational Corporations
Jason G. Cummins
Comment: Samuel S. Kortum
Author Index
Subject Index

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