The Effect of Tax Treaties on Market Based Finance: Evidence using Firm-Level Data

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Title: The Effect of Tax Treaties on Market Based Finance: Evidence using Firm-Level Data
Authors: Davies, Ronald B.
Killeen, Neill
Permanent link: http://hdl.handle.net/10197/9548
Date: Oct-2018
Abstract: Tax arbitrage is often cited as a potential motive for the substantial growth and complexity of market based finance. Tax treaties are an important feature of the international tax system and can be used to reduce the tax burden on cross-border capital flows. Using an EU firm-level dataset and a number of alternative tax treaty measures, this paper investigates the importance of tax treaties on the investment decisions of a large sample of non-bank financial institutions. The novel dataset includes conduits such as special purpose entities which are often used to channel cross-border investments. Our results show that tax treaties influence the extensive margin of non-bank financial FDI with conduit related investments particularly sensitive to international taxation.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 46
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2018/18
Keywords: Tax treatiesMarket-based financeShadow banking systemConditional logit modelMixed logit modelNested logit model
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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