Corporate Taxation and Multinational Activity

Explanatory variables

Fhll sample

Est. as
predicted

Exemption
method

Est. as
predicted

Credit
method

Est. as
predicted

Parent country corporate tax rate: ⅞,t-ι

0.850

(1.80)

Y

0.872

(1.61)

Y

-0.000
(0.00)

?

Host country corporate tax rate: f₇∙,t-i

-1.428

(-2.45)

Y

-1.887

(-2.58)

Y

-0.685

(-0.76)

Withholding tax rate on repatriated profits: t_j^,_t~ι

-1.612

(-3.26)

Y

-2.111

(-2.65)

Y

-1.256

(-2.11)

Y

Parent country depreciation allowances: <5^-i

-4.257

(-4-51)

N

-3.508

(-2.10)

N

-3.301

(-2.78)

N

Host country depreciation allowances: <P∕,t-i

-0.427

(-0.65)

Y

-0.544

(-0.67)

Y

-0.495

(-0.49)

Y

i_i,_t-ι × ASK_ijft-_j × I(ΔS^,Jfy_j⅛-ι > 0)

-0.004

(-0.11)

N

' 0.014
(0.35)

Y

-0.220

(-1.24)

N

δ_i,_t-ι × ASK_ijft-I × l(ASK_ijft-ι > 0)

-0.165

(-2.31)

Y

(θ.l36

(-1.33)

Y

-0.361

(-2.28)

Y

δ_j,t-ι × ASK_ijft-ι × I(ASK_ijft-ι > 0)

0.074
(2.08)

Y

0.089

(1.23)

Y

' 0.015
(0.45)

Y

∖o⅛GDP_it + GDP_jty. ZGDP_ijt

1.955

(3.36)

Y

2.340

(3.02)

Y

4.951

(2.99)

Y

log(GDP_it∕GDP_jt): AGDP_ijt

-0.138

(-2.79)

Y

0.002
(0.03)

N

-0.312

(-5.12)

Y

ASK_ijt × AGDP_ijt × I(ASK_ijt > 0): INTl^α

' 0.119
(0.94)

N

0.316

(1.13)

N

0.330

(1.23)

N

ASK_ijt × ZGDP_ijt × I(ASK_ijt > 0): INT2^α

0.217

(1.43)

N

0.106
(0.43)

N

0.940
(2.42)

N

ASK_ijt × AGDP_ijt × I(ASK_ijt < 0): INT3^α

0.047

(2.90)

N

0.015

(0.71)

N

0.085

(2.90)

N

(ΔSJ⅛)²× Iog(DLST_o): INT4^α

Observations

R²

Fixed country-par effects: F-Statistic
degrees of freedom(DFl∕DF2)
p-value

Fixed time effects: F-Statistic
degrees of freedom(DFl∕DF2)
p-value

Sample Selection (Mill’s ratio)
p-value

-0.002

(-2.10)

2195

0.997

506.59
(388,1782)
0.000

10.53

(10,1782)
0.000 '

-0.133

0.124

Y

-0.000
(-0.12)

1257
0.998
2.68E+05
(223,1008)
0.000

13.77
(11,1008)
' 0.000 '

-0.149

0.273

Y

-0.002
(-1.44)

789
0.996

315.68

(138,626)
0.000
6.44

(11,626)
0.000
0.373
0.381

Y