TY - JOUR
T1 - Host country corporate income tax rate and foreign subsidiary survival
AU - Farah, Bassam
AU - Elias, Rida
AU - Chakravarty, Dwarka
AU - Beamish, Paul
N1 - Funding Information:
This research was in part funded by the American University of Beirut (AUB) University Research Board (URB) grant 2017-18 .
Funding Information:
The authors thank Editor-in-Chief Ajai Gaur and three anonymous reviewers for their constructive comments and suggestions. We also thank Lorraine Eden for reviewing an early draft and providing us with helpful feedback. This research was in part funded by the American University of Beirut (AUB) University Research Board (URB) grant 2017-18.
Publisher Copyright:
© 2021 The Authors
PY - 2021/2
Y1 - 2021/2
N2 - Host country tax considerations are critical to multinational enterprise (MNE) foreign direct investment decisions, but understudied in international business (IB) research. We address this gap by examining the relationship between host country corporate income tax rates (HCCITRs) and foreign subsidiary survival. We develop our hypothesis drawing upon location/country-specific advantage theory and international tax literature. Our longitudinal sample (1990–2013) comprises 13,468 MNE subsidiaries in 78 countries. Results indicate a one standard deviation (7.7 %) decrease in HCCITR increases subsidiary survival probability (at any given time) by 33 %. This effect is stronger compared to several well studied explanatory variables in IB survival analysis.
AB - Host country tax considerations are critical to multinational enterprise (MNE) foreign direct investment decisions, but understudied in international business (IB) research. We address this gap by examining the relationship between host country corporate income tax rates (HCCITRs) and foreign subsidiary survival. We develop our hypothesis drawing upon location/country-specific advantage theory and international tax literature. Our longitudinal sample (1990–2013) comprises 13,468 MNE subsidiaries in 78 countries. Results indicate a one standard deviation (7.7 %) decrease in HCCITR increases subsidiary survival probability (at any given time) by 33 %. This effect is stronger compared to several well studied explanatory variables in IB survival analysis.
UR - http://www.scopus.com/inward/record.url?scp=85099212444&partnerID=8YFLogxK
U2 - 10.1016/j.jwb.2020.101186
DO - 10.1016/j.jwb.2020.101186
M3 - Short survey
AN - SCOPUS:85099212444
SN - 1090-9516
VL - 56
JO - Journal of World Business
JF - Journal of World Business
IS - 2
M1 - 101186
ER -