Taxation and the transfer of technology by multinational firms

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Abstract

This paper analyzes a multinational's transfer of technology to a foreign subsidiary for the case where there is a risk of expropriation. An expropriation is assumed to give rise to competition between the parts of the previous multinational enterprise. To reduce the benefit of expropriation, the multinational generally transfers an inferior technology, even if the transfer of technology is costless. With a reduced benefit of expropriation, the multinational has to pay lower taxes to prevent expropriation. The multinational optimally transfers additional technology over time if it has a finite horizon in the country. For this case, tax payments also are shown to increase over time in a tax holiday like fashion.
Original languageEnglish
PublisherUnknown Publisher
Volume1995-41
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-41

Fingerprint

Multinational firms
Transfer of technology
Taxation
Expropriation
Multinationals
Tax
Foreign subsidiaries
Holidays
Payment
Technology transfer
Low pay
Multinational enterprises
Finite horizon

Keywords

  • Taxation
  • Multinational Companies
  • Technology Transfer
  • international economics

Cite this

Huizinga, H. P. (1995). Taxation and the transfer of technology by multinational firms. (CentER Discussion Paper; Vol. 1995-41). Unknown Publisher.
Huizinga, H.P. / Taxation and the transfer of technology by multinational firms. Unknown Publisher, 1995. (CentER Discussion Paper).
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Huizinga, HP 1995 'Taxation and the transfer of technology by multinational firms' CentER Discussion Paper, vol. 1995-41, Unknown Publisher.

Taxation and the transfer of technology by multinational firms. / Huizinga, H.P.

Unknown Publisher, 1995. (CentER Discussion Paper; Vol. 1995-41).

Research output: Working paperDiscussion paperOther research output

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AB - This paper analyzes a multinational's transfer of technology to a foreign subsidiary for the case where there is a risk of expropriation. An expropriation is assumed to give rise to competition between the parts of the previous multinational enterprise. To reduce the benefit of expropriation, the multinational generally transfers an inferior technology, even if the transfer of technology is costless. With a reduced benefit of expropriation, the multinational has to pay lower taxes to prevent expropriation. The multinational optimally transfers additional technology over time if it has a finite horizon in the country. For this case, tax payments also are shown to increase over time in a tax holiday like fashion.

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KW - Technology Transfer

KW - international economics

M3 - Discussion paper

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T3 - CentER Discussion Paper

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PB - Unknown Publisher

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Huizinga HP. Taxation and the transfer of technology by multinational firms. Unknown Publisher. 1995. (CentER Discussion Paper).