Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions

Exploiting a large panel with an exhaustive coverage of cross-border acquisitions across more than 30 countries over more than a decade, this paper provides a comprehensive view of the eect of taxation on the desire of multinational enterprises to invest abroad. By considering the dierences between worldwide and territorial tax systems, direct and indirect forms of taxation, and horizontal and vertical FDI strategies, the results suggest that taxes have a much more nuanced eect on FDI than suggested to date. Specically, the corporate tax elasticity diers across the dimensions mentioned above. Moreover, sales taxes aect horizontal, but not vertical CBAs.