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Global evidence on profit shifting within firms and across time

Author

Listed:
  • F. Fotis Delis
  • M. Delis

    (Audencia Business School)

  • L. Luc Laeven
  • S. Ongena

Abstract

We provide estimates of profit shifting for over 2 million firm-year observations in 100 countries over the period 2009–2020. Employing nonparametric estimation techniques within a mainstay model of profit shifting, we examine how the profits of both parent and subsidiary firms within a multinational group respond to marginal changes in the composite tax indicator. The key advantage of this approach is that it yields firm-year estimates of profit shifting. Multinational firms engage in extensive profit shifting by maintaining affiliates in low-tax countries and zero-tax havens. Multinational groups with an ultimate tax-haven owner exhibit the largest profit response to tax incentives. Our new database opens important avenues for analyzing the sources and effects of profit shifting.

Suggested Citation

  • F. Fotis Delis & M. Delis & L. Luc Laeven & S. Ongena, 2025. "Global evidence on profit shifting within firms and across time," Post-Print hal-05133748, HAL.
    • Handle: RePEc:hal:journl:hal-05133748
    DOI: 10.1016/j.jacceco.2024.101744
    Note: View the original document on HAL open archive server: https://hal.science/hal-05133748v1
    as

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