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- Title
International Taxation and the Direction and Volume of Cross-Border M&As.
- Authors
HUIZINGA, HARRY P.; VOGET, JOHANNES
- Abstract
We show that the parent-subsidiary structure of multinational firms created by cross-border mergers and acquisitions is affected by the prospect of international double taxation. Specifically, the likelihood of parent firm location in a country following a cross-border takeover is reduced by high international double taxation of foreign-source income. At the same time, countries with high international double taxation attract smaller numbers of parent firms. A unilateral elimination of worldwide taxation by the United States is simulated to increase the proportion of parent firms locating in the United States following cross-border mergers and acquisitions from 53% to 58%.
- Subjects
UNITED States; TAXATION; INTERNATIONAL business enterprises; MERGERS &; acquisitions; TAXATION of foreign income; DOUBLE taxation
- Publication
Journal of Finance (Wiley-Blackwell), 2009, Vol 64, Issue 3, p1217
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.2009.01463.x