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WANG Zi : Multinational Production and Corporate Taxes: A Quantitative Assessment

[Published]: 2020-04-29[Source]: [Browsing]:

Speaker:WANG Zi (Assistant Professor, Shanghai University of Finance and Economics)

Description:I study the welfare implications of corporate taxation in the presence of multinational production (MP) in order to understand the consequences of international tax competition and cooperation. I build a quantifiable multi-country general equilibrium model with trade, MP, and salient features of international corporate tax system. The model delivers structural equations that can be used to estimate the model’s key parameters governing the response of firms’ production locations to changes in corporate tax rates. Calibrating the model to data on 28 countries, I find that the U.S. corporate tax reform in 2017 would increase the U.S. real income by about 1% but decrease the average real income of other countries by 0.075%. In a non-cooperative tax game, I find that each country has strong incentives to lower its corporate tax rate on domestic firms in order to gain from firm entry at the expense of other countries, which leads to welfare losses in participation countries. International tax cooperation can increase the real income in each participation country by about 1%.

Time:May 6,2020(Wednesday), 14:00-15:30

Venue:Tencent Meeting