Economic effects of regional tax havens
By: Mihir A. Desai, C. Fritz Foley, James R. Hines.
Contributors: Foley, C. Fritz.; Hines, James R.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10806; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10806.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Tax havens.; Taxation.
Description: "How does the opportunity to use tax havens influence economic activity in nearby non-haven countries? Analysis of affiliate-level data indicates that American multinational firms use tax haven affiliates to reallocate taxable income away from high-tax jurisdictions and to defer home country taxes on foreign income.  Ownership of tax haven affiliates is associated with reduced tax payments by nearby non-haven affiliates, the size of the effect being equivalent to a 20.8 percent tax rate reduction.  The evidence also indicates that use of tax havens indirectly stimulates the growth of operations in non-haven countries in the same region.  A one percent greater likelihood of establishing a tax haven affiliate is associated with 0.5 to 0.7 percent greater sales and investment growth by non-haven affiliates, implying a complementary relationship between haven and non-haven activity.  The ability to avoid taxes by using tax haven affiliates therefore appears to facilitate economic activity in non-haven countries within regions"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.