Principal speaker
Pascalis Raimondos-Moller
Griffith Asia Institute - Research Seminar Series
‘Profit Shifting in Multinational Enterprises: New Methods and Evidence’
Presented by: Professor Pascalis Raimondos-Møller, Professor of Economics, Copenhagen Business School and Visiting Research Fellow at the Griffith Asia Institute.
Do multinationals exploit corporate tax differences across countries to their benefit? The answer that this paper gives is affirmative and as such is similar to the answer given within the profit-shifting literature. However, the novelty of this paper is on the measurement of what "profit" is. While the previous literature uses tax-authority data on reported profits (data that can easily be misreported), we estimate true-profit margins (i.e. price—marginal cost ratios) and we examine how these margins change with corporate tax differences. Using a unique firm-level panel dataset that identifies multinationals and their ownership structure, we apply the Roeger (1995) method for estimating markups for the multinational concern. We find a robust positive effect of corporate tax differences to price-cost markups. If high markups are interpreted as a sign of market power, our results point to a reason that creates such market power. Such results are novel to the literature that until now has only focused on the tax revenue repercussions of profit shifting.
Pascalis Raimondos-Møller is Professor of Economics at the Copenhagen Business School and currently a Visiting Research Fellow at GAI. His work focuses mainly on international tax policy issues, where he has published numerous research articles in leading economic journals. He is a member of the Danish Social Science Research Council and of the Danish Competition Authority.
- Thursday 29 August 2013
- N72, Meeting Room -1.18
- Nathan campus
- 12.30 – 1:50pm
A light lunch will be provided.
To RSVP, please contact Natasha Vary on (07) 3735 5322 or n.vary@griffith.edu.au by 5.00pm Monday 26 August 2013.