Corporate Taxation and Multinational Activity



Table 3: Robustness

Tax components

Model A

Model B

Model C

Model D

Model E

Model F

Model G

Model H

Model I

Parent country corporate tax rate: ⅞,*-ι

045

CÔ8Ï7

LÏ7Ô

Гпз

СЫ46

CË5Ï7

ЙЁ262

CË7Ô2

СШ6

(1.80)

(0.87)

(2.21)

(2.41)

(0.80)

(1.15)

(-0.36)

(1.49)

(1.71)

Host country corporate tax rate: ij,t-ι

-1.498

-2.161

-1.716

-1.302

-0.892

-1.136

-1.402

-1.670

-1.626

(-2.57)

(-1.91)

(-2.57)

(-2.21)

(-1.27)

(-2.10)

(-1.66)

(-2.76)

(-2.74)

Withholding tax rate on repatriated profits: tj,t-1

-1.545

-2.439

-2.415

-1.359

-1.354

-1.606

-1.554

-1.591

-1.453

(-3.06)

(-1.80)

(-3.33)

(-2.79)

(-2.32)

(-3.24)

(-2.14)

(-3.22)

(2.93)

Parent country depreciation allowances: <5⅛,t-1

-4.530

-4.869

-4.452

-4.294

-3.360

-5.106

-4.296

-3.617

-3.848

(-4.74)

(-2.28)

(-3.77)

(-4.45)

(-2.93)

(-4.91)

(-2.04)

(-3.68)

(-3.99)

Host country depreciation allowances:

0.201

-1.176

0.067

-0.229

0.562

-0.721

-1.620

-0.355

-0.324

(0.29)

(-1.19)

(0.10)

(-0.34)

(0.72)

(-0.98)

(-1.22)

(-0.52)

(-0.46)

i≈-,t-ι × ΔS7⅛,t-ι × I(ΔS7⅛.t-ι > 0)

-0.001

0.164

1.077

0.079

0.063

0.034

0.044

-0.019

0.004

(-0.02)

(2.48)

(0.84)

(2.22)

(0.85)

(0.85)

(0.96)

(-0.47)

(0.09)

<5i,t-ι × ΔSΛy ,-ι × I(ΔSΛy ,~ι > 0)

0.005

-0.073

0.698

0.018

-0.113

-0.063

-0.188

-0.109

-0.082

(0.09)

(-0.56)

(0.53)

(0.54)

(-0.98)

(-0.79)

(-1.42)

(-1.41)

(-1.07)

⅞,t-ι × ΔS7⅛.t-ι × I(ΔS7⅛.t-ι > 0)

0.006

-0.007

-0.465

-0.093

-0.375

-0.000

-0.110

0.069

0.050

(°-15)

(-0.06)

(-0.59)

(-2.33)

(-152)

(-θ-θɪ)

(-149)

_ (19°)

_ (136) _

Notes : H AC-corrected t-values in parentheses (Newey and West, 1987).

Model A (2195 observations): Secondary school enrollment instead of tertiary school enrollment.

Model B (1011 observations): Skill measure as proposed by Markusen (2002: p. 228) rather than tertiary school enrollment.

Model C (1410 observations): Capital stock per worker instead of tertiary school enrollment.

Model D (2195 observations): Gravity model instead of Knowledge Capital model.

Model E (1792 observations): Dynamic model as proposed by Arellano and Bond (1991) for panel data; Lagged dependent variable amounts to 0.221 (s.e. = 0.110).

Model F (2011 observations): Excluding transition economies (Czech Republic, Hungary and Poland).

Model G (846 observations): Excluding transition economies and non-EU members. 12 remaining EU economies.

Model H: р-value of F-test on joint significance of all third-country effects: 0.000; р-value of F-test on joint significance of all third-country effects of profit taxation: 0.006.

Model I: p-value of F-test on joint significance of all third-country effects: 0.000; p-value of F-test on joint significance of all third-country effects of profit taxation: 0.008.

All sensitivity checks should be compared to the full sample results in Table 2.



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