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Taxation And The Birth Of Foreign Subsidiaries

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  • SINN, H.W.

Abstract

The 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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Suggested Citation

  • Sinn, H.W., 1990. "Taxation And The Birth Of Foreign Subsidiaries," Papers 66, Princeton, Woodrow Wilson School - Discussion Paper.
    • Handle: RePEc:fth:priwdp:66
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    References listed on IDEAS

    as
    1. Assaf Razin & Joel Slemrod, 1990. "Taxation in the Global Economy," NBER Books, National Bureau of Economic Research, Inc, number razi90-1.
    2. repec:bla:econom:v:41:y:1974:i:161:p:25-34 is not listed on IDEAS
    3. Edwards,Jeremy & Franks,Julian & Mayer,Colin & Schaefer,Stephen (ed.), 1986. "Recent Developments in Corporate Finance," Cambridge Books, Cambridge University Press, number 9780521329644, October.
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    Full references (including those not matched with items on IDEAS)

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