The relationship between dividends and taxes continues to be an open empirical question. While some researchers find that taxes have a first-order...Read more
16 January 2018
Using hand-collected data on 691 corporate inversions from 11 home countries into 45 host destinations in 1996-2013, we document that corporations invert to destinations with lower tax rates and similar governance standards. Indeed, passage of bilateral double taxation treaties (DTTs), which provide tax incentives for inversions, and bilateral tax information exchange agreements (TIEAs), which improve transparency of tax havens, leads to an increase in corporate inversions.