publication . Article . Preprint . 2006

International taxation and the direction and volume of cross-border M&As

Huizinga, Harry; Voget, Johannes;
Open Access English
  • Published: 01 Dec 2006 Journal: Journal of Finance, volume 64, issue 3, pages 1,217-1,249 (issn: 0022-1082, Copyright policy)
Abstract
In an international merger or acquisition, the national residences of the acquirer and the target determine to what extent the newly created multinational firm is subject to international double taxation. This paper presents evidence that the parent-subsidiary structure of newly created multinational firms reflects the prospect of international double taxation. The number of acquiring firms at the national level similarly reflects international double taxation. The evidence suggests that tax policy in the form of lower tax rates or the elimination of residence-based worldwide taxation attracts additional parent companies of multinational firms. On the basis of o...
Subjects
Medical Subject Headings: health care economics and organizationseducation
free text keywords: international taxation; mergers and acquisitions, jel:F23, jel:H25
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