Measuring Misalignment: The Location of Us Multinationals’ Economic Activity Versus the Location of Their Profits

20 Pages Posted: 7 Dec 2018

See all articles by Alex Cobham

Alex Cobham

King's College London

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies

Date Written: January 2019

Abstract

A major international effort—the Organisation for Economic Co‐operation and Development Base Erosion and Profit Shifting initiative—aims to reduce the extent of misalignment between the profits of multinational groups, and the location of their real economic activity. This article uses survey data on the international operations of US‐headquartered multinational groups to show major misalignments of profit. A small number of “profit‐haven” jurisdictions are seen to have captured a disproportionate share of total profits, resulting in serious disadvantages for most countries, regardless of income level.

Keywords: base erosion, corporate tax, developing countries, profit shifting, tax avoidance, unitary taxation

Suggested Citation

Cobham, Alex and Jansky, Petr, Measuring Misalignment: The Location of Us Multinationals’ Economic Activity Versus the Location of Their Profits (January 2019). Development Policy Review, Vol. 37, Issue 1, pp. 91-110, 2019, Available at SSRN: https://ssrn.com/abstract=3296430 or http://dx.doi.org/10.1111/dpr.12315

Alex Cobham (Contact Author)

King's College London

Strand
London, England WC2R 2LS
United Kingdom

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies ( email )

Opletalova St. 26
Prague, 11000
Czech Republic

HOME PAGE: http://ies.fsv.cuni.cz/en/staff/jansky

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