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Are less developed countries more exposed to multinational tax avoidance?: Method and evidence from micro-data

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  • Niels Johannesen
  • Thomas Tørsløv
  • Ludvig Wier

Abstract

NOTE | Revised version May 2017 available. View and download the revised version . We use a global dataset with information on 210,000 corporations in 102 countries to investigate whether cross-border profit shifting by multinational firms is more prevalent in less developed countries. We propose a novel technique to study aggressive profit shifting and improve the credibility of existing techniques. Our results consistently show that the sensitivity of reported profits to profit-shifting incentives is negatively related to the level of economic and institutional development.

Suggested Citation

  • Niels Johannesen & Thomas Tørsløv & Ludvig Wier, 2016. "Are less developed countries more exposed to multinational tax avoidance?: Method and evidence from micro-data," WIDER Working Paper Series wp-2016-10, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2016-10
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