Top publication by Maximilian Todtenhaupt
The article "International taxation and productivity effects of M&As" has been published in Journal of International Economics.
Journal of International Economics is on level 4 in the ABS Academic Journal Guide.
Todtenhaupt, Maximilian, and Johannes Voget: International taxation and productivity effects of M&As, Journal of International Economics, 2021, 103438, Online 29.01.2021.
We investigate how changes in firm productivity after M&As are affected by differences in profit taxation between the target and the acquirer. We argue that tax differentials distort the efficient allocation of productive factors following an M&A and thus inhibit the realization of productivity improvements.
Using firm-level data on inputs and outputs of production as well as on corporate M&As, we show that the absolute tax differential between the locations of two merging firms reduces the subsequent total factor productivity gain. This effect is concentrated in horizontal M&As and less pronounced when firms can use international profit shifting to attenuate effective differences in taxation.