Topic: The Rise of Profit and The Decline of Entry: Effects of anti-tax Avoidance on MNCs in China

Speaker: Associate Professor Zhikuo Liu

Time: 14:30, June 15, 2022

Location: Tencent meeting: 858-143-187

Abstract: Anti-tax avoidance on multinationals has been at the top of the international tax policy agenda since the 2008 global financial crisis. This paper employs the DID method to identify the effects of anti-tax avoidance on MNCs in China and decomposes the factors through which the policy takes effect. We find that for MNCs with negative profit ex ante, profit-to-asset ratio of MNCs in exposed industries increased by nearly 10%. Further decomposition of profit shows that both revenue and cost increased, for 30% and 20% separately, of which the scale is consistent with increase of profit. However, the retained profits are at the cost of a shrinking of the real economy, such as a decline in FDI entry.

Introduction of the speaker: Liu Zhikuo, associate professor and doctoral supervisor of the School of Economics, Fudan University. His research focuses on tax policy and corporate behavior. His papers have been published in American Economic Review, Review of Economic Studies, Review of Economics and Statistics, Economic Research Journal, Management World and other authoritative journals at home and abroad.