Conference Agenda

We study international spillovers of corporate tax reforms in a fragmented global tax regime. Using firm-level evidence on the 2017 U.S. Tax Cuts and Jobs Act (TCJA) and a quantitative general-equilibrium model, we illustrate how multinational enterprises (MNEs) propagate local policy shocks throughout the global economy. Our framework emphasizes two key intrinsic properties of intangible capital: non-rivalry and mobile ownership. We find the TCJA generated positive outward spillovers: First, it boosted U.S. MNEs’ intangible investment, raising their foreign subsidiaries' output. Second, it increased tangible investment of foreign MNEs' U.S. subsidiaries, incentivizing them to expand intangible investment at home. Conversely, a Global Minimum Tax (GMT) implemented by the rest of the world generates negative inward spillovers for the United States, even if U.S.-parented MNEs are exempt. These findings illustrate that there is no such thing as a purely domestic corporate tax policy.

This paper examines how the 2017 U.S. Tax Cuts and Jobs Act (TCJA) affected the international allocation of patents by U.S. multinational firms. Using firm–country–year data from the Orbis Intellectual Property database and a difference-in-differences framework, it analyzes how the TCJA’s international provisions (GILTI, FDII, and BEAT) reshaped patent-shifting behavior. Descriptive evidence shows a slowdown in U.S. firms’ patent transactions around enactment and a broader post-reform decline, suggesting reduced observable patent shifting. Econometric results reveal heterogeneous responses: intra-company patent offshoring declines, while transactions involving non-practicing entities move in the opposite direction, indicating substitution across shifting channels. Although estimates are often imprecise, the overall pattern is consistent with reduced outward shifting and some increase in repatriation. The findings suggest that the TCJA altered incentives at specific margins but did not eliminate IP-based profit shifting.

We investigate the effect of the Global Intangible Low-Tax Income (GILTI) regime on U.S. multinationals’ (MNEs) global investment activity. Enacted as part of the Tax Cuts and Jobs Act (TCJA) of 2017, the GILTI provision levies a tax on U.S. MNEs’ foreign profits in excess of a 10% deemed return on tangible assets (QBAI). Using U.S. tax administrative microdata, we examine whether U.S. MNEs exposed to GILTI alter the amount and proportion of their tangible and intangible assets or the location (domestic vs. foreign, haven vs. non-haven) of their investments. While prior studies on the effect of GILTI on investment use public financial statement data to identify GILTI-treated MNEs, we find that public proxies poorly identify exposure to GILTI as reflected on the tax return. Therefore, we define the treatment group using U.S. MNEs’ actual exposure to GILTI based on the tax return, exploiting the rapid and unanticipated enactment of the TCJA.

As the global financial crisis highlighted, firms' choice between external or internal funds to finance investment has large-scale implications for the wider economy. While tax policy has shaped debt–equity preferences, less attention has been devoted to how it can motivate the use of internal financing. This paper studies the Deduction of Retained and Reinvested Profits (DRRP), a Portuguese tax incentive meant to encourage the self-financing of tangible fixed assets investment. We evaluate DRRP’s impact on firm investment, financing decisions, and workforce composition. Our findings show that, as intended, investment and reserves respond to the take-up of the tax credit. However, debt financing also increases significantly, suggesting that instead of switching between external and internal financing, firms use the newly acquired assets as collateral to secure additional funding. As employment and real wages grow, there is no evidence of skill-biased investments.