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Globalization and U.S. Corporate Tax Policies : Evidence from Import Competition

This paper studies how globalization affects the corporate tax policies of U.S. manufacturing firms. Using U.S.-granting China Permanent Normal Trade Relations as a quasi-natural experiment, we find a significant increase in tax reduction activities for firms facing higher exposure to Chinese imports. The effect is more pronounced for firms with higher managerial slack. We also find that the effect is stronger for firms in less diversified products market and faster changing industries. We also show that U.S. firms facing higher Chinese import competition are more likely to engage in other tax-motivated activities: acquisition of subsidiaries in low-tax regions and suspected transfer pricing. Furthermore, we explore the 2017 tax cut and the recent U.S.-China trade dispute and find that firms engage less in tax reduction activities after the 2017 tax cut and after the tariff increase for Chinese imports.

Ketersediaan

Informasi Detail

Judul Seri

MANAGEMENT SCIENCE; Vol.68 No.8 August 2022

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 6145-6162

Bahasa

English

ISBN/ISSN

-

Klasifikasi

NONE

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

TAX PLANNING
GLOBALIZATION
NATURAL EXPERIMENT

Info Detail Spesifik

https://doi.org/10.1287/mnsc.2021.4121

Pernyataan Tanggungjawab

Tao Chen, Chen Lin, Xiang Shao

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