Foreign Investment of US Multinationals: The Effect of Tax Policy and Agency Conflicts

Albertus, James F.; Glover, Brent; Levine, Oliver

doi:10.2139/ssrn.3172468

Cited by 10 publications

(6 citation statements)

References 66 publications

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“…We find the incentives to invest in foreign operations are primarily driven by tax incentives, government agencies and formal sector companies, and they can be easily created with capacity building improvement schemes. However, these agencies and companies cannot compete with businesses with larger companies and thus there is a need for governments to accelerate their growth by creating taxation, creating an environment for them via appropriate tax incentives that enhances their sustainability and growth [53,54].…”

Section: Investment Opportunities In Bulukumba Regencymentioning

confidence: 99%

The Role of Natural and Human Resources on Economic Growth and Regional Development: With Discussion of Open Innovation Dynamics

Saleh¹,

Surya

Ahmad

et al. 2020

Journal of Open Innovation: Technology, Market, and Complexity

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Regional economic growth is closely related to the optimization of the use of natural and human resources. This study aims to analyze: (1) The use of natural and human resource potential works as a determinant of the economic growth of Bulukumba Regency; (2) The influence of natural resources, human resources, community culture and regulation on economic growth in Bulukumba Regency. The research method used is a combination of mixed models, namely a combination of quantitative and qualitative approaches. Data was obtained through observation, survey and documentation. The results of the study show that optimizing the use of natural resources without human resource development causes its contribution to economic growth in Bulukumba Regency to be quite low which becomes an obstacle to the acceleration of economic development. The influence of natural resources, human resources, and community culture together has a significant effect on economic growth in Bulukumba Regency with a coefficient of determination 47.2%. This study recommends optimizing resource potential and strengthening human resource capacity through the use of technology and changes in community culture, which will encourage economic growth in Bulukumba Regency, South Sulawesi Province, Indonesia.

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Section: Investment Opportunities In Bulukumba Regencymentioning

confidence: 99%

The Role of Natural and Human Resources on Economic Growth and Regional Development: With Discussion of Open Innovation Dynamics

Saleh¹,

Surya

Ahmad

et al. 2020

Journal of Open Innovation: Technology, Market, and Complexity

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“…Curtis, Garın, & Mehkari (2017) think about news shocks surrounding the tax to get at anticipatory effects. Albertus, Glover, & Levine (2018) study how the tax and agency conflicts affect the overseas investment of incumbent U.S. multinationals. Papers with an empirical focus include Arena & Kutner (2015), who look at similar reforms to removing the repatriation tax, in the context of British and Japanese firms.…”

Section: R a F T O N L Ymentioning

confidence: 99%

Policy Effects of International Taxation on Firm Dynamics and Capital Structure

Spencer

2021

The Review of Economic Studies

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This paper develops a quantitative open economy framework with dynamics, firm heterogeneity and financial frictions to study the impact of corporate tax reforms targeted at multinationals. The model quantifies their impact on firm selection, production and welfare. Firms draw idiosyncratic shocks, invest in capital, choose optimal financing and select endogenously into selling abroad, through exporting or FDI. I apply this framework to the removal of the U.S. repatriation tax as in the Tax Cuts and Jobs Act. The reform’s impact trades-off two selection effects — more offshoring versus greater U.S. business dynamism. The reform leads to higher U.S. welfare at little cost to the Treasury. A series of exercises illustrate that the novel features of this framework have significant quantitative implications. The reform gives starkly different cross-sectional predictions and lower welfare gains when financial frictions are removed and it is welfare reducing in a static counterpart of the model.

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“…As with the Tax Reform Act of 1986, 12 a substantial simplification was achieved in the 2017 legislation by the near-doubling of the standard deduction, which is predicted to reduce the fraction of itemizing returns from about 30 percent to about 12 percent (Tax Foundation 2017). 13 Undoubtedly, this change will reduce both administrative and compliance costs. To the extent that the itemized deductions should be subtracted from income to obtain a better measure of well-being, as is probably true for most medical expenses (as a counterexample, elective cosmetic surgery expenses are not deductible), this provision will also erode horizontal equity.…”

Section: Implications For Simplicitymentioning

confidence: 99%

“…The cat-andmouse game between the IRS issuing regulations and new ways around them has just begun (for further discussion of the gaming opportunities opened up by the Tax Cuts and Jobs Act, see Kamin et al forthcoming). An even bigger problem might be monitoring the larger incentives now built in to reclassify labor income as 13 As with the Camp proposal mentioned above, the doubling of the standard deduction was coupled with the repeal of personal and dependent exemptions, which are contingent on family size. The profamily nature of the income tax system was largely retained by an expansion of the existing child credit and the introduction of a new credit for any dependent, including children who are too old to be eligible for the child tax credit.…”

Section: Implications For Simplicitymentioning

confidence: 99%

Is This Tax Reform, or Just Confusion?

Slemrod

2018

Journal of Economic Perspectives

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Based on the experience of recent decades, the United States apparently musters the political will to change its tax system comprehensively about every 30 years, so it seems especially important to get it right when the chance arises. Based on the strong public statements of economists opposing and supporting the Tax Cuts and Jobs Act of 2017, a causal observer might wonder whether this law was tax reform or mere confusion. In this paper, I address that question and, more importantly, offer an assessment of the Tax Cuts and Jobs Act. The law is clearly not “tax reform” as economists usually use that term: that is, it does not seek to broaden the tax base and reduce marginal rates in a roughly revenue-neutral manner. However, the law is not just a muddle. It seeks to address some widely acknowledged issues with corporate taxation, and takes some steps toward broadening the tax base, in part by reducing the incentive to itemize deductions.

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Foreign Investment of US Multinationals: The Effect of Tax Policy and Agency Conflicts

Cited by 10 publications

References 66 publications

The Role of Natural and Human Resources on Economic Growth and Regional Development: With Discussion of Open Innovation Dynamics

The Role of Natural and Human Resources on Economic Growth and Regional Development: With Discussion of Open Innovation Dynamics

Policy Effects of International Taxation on Firm Dynamics and Capital Structure

Is This Tax Reform, or Just Confusion?

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