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Did tax treaties restrain the profit shifting of Chinese multinationals?

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Abstract

The Chinese government has been worrying about the outflow of profit of the multinational corporations. Using data from various sources, this paper evaluates the inhibitory effect of bilateral tax treaties on profit shifting behavior of Chinese multinationals. The paper finds strong evidence for profit shifting out of China due to corporate tax differences, as well as statistically significant inhibitory effect of tax treaties. Besides, the profit shifting activities mainly exist in non-manufacturing industries.

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Data availability

The dataset generated during the current study is not publicly available as it contains proprietary information that the authors acquired through a license. Information on how to obtain it and reproduce the analysis is available from the corresponding author on request.

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No funding was received for conducting this study.

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Authors and Affiliations

  1. School of Economics and Management, Southeast University, Sipailou 2, Nanjing, 210096, People’s Republic of China

    Mantian Xue & Yuwei Zhang

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  1. Mantian Xue
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  2. Yuwei Zhang
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Correspondence to Mantian Xue.

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Xue, M., Zhang, Y. Did tax treaties restrain the profit shifting of Chinese multinationals?. Rev World Econ (2024). https://doi.org/10.1007/s10290-024-00526-8

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  • DOI: https://doi.org/10.1007/s10290-024-00526-8

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