The effect of the corporate tax rate on the trade balance
Past research indicates that MNCs may be engaging in income shifting practices. Such practices could bias the trade balance, if the intrafirm trade is substantial. This article examines the effect of the tax differential on the trade balances of OECD countries. The results indicate that the trade balance is adversely affected when the tax differential is positive, for a number of countries.
Volume (Year): 14 (2007)
Issue (Month): 5 ()
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