DP16615 Global Evidence on Profit Shifting: The Role of Intangible Assets

Author(s): Manthos Delis, Fotis Delis, Luc Laeven, Steven Ongena
Publication Date: October 2021
Date Revised: January 2022
Keyword(s): global sample, institutional quality, intangible assets, Multinational Enterprises, Nonparametric estimation, Profit shifting
JEL(s): F23, H25, H26, H32, M41
Programme Areas: Financial Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16615

We study global variations in profit shifting and the role played therein by firms' intangible assets. Employing nonparametric estimation techniques within a mainstay model of profit shifting, we construct a global database, with subsidiaryâ??year estimates of profit shifting from 95 countries for the period 2009â??17. A key determinant of profit shifting is the subsidiaries' ratio of intangible assets, and this channel is stronger in countries with weaker institutions. Both our new database and our novel findings open important avenues to analyze the sources and effects of profit shifting.