Taxation and the Birth of Foreign Subsidiaries
AbstractThe paper studies the influence of tax policy on foreign direct investment with a particular emphasis on immature subsidiaries. Among other things it shows that taxes on repatriations reduce the subsidiary's "birth weight", that lump sum taxes reduce its cost of capital, and that the possibility of deferral increases this cost. The paper rejects the popular weighted average specification of the subsidiary's cost of capital.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3519.
Date of creation: Nov 1990
Date of revision:
Publication status: published as Herberg, Horst and Ngo Van Long (eds.) Trade, welfare, and economic policies: Papers in Honour of Murray C . Kemp. Ann Arbor: Michigan University Press, 1993.
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