This note proposes the continuous treatment approach as a valuable alternative to propensity score matching for evaluating
economic effects of merger and acquisitions (M&As). This framework allows considering the variation in treatment intensities
explicitly, and it does not call for an arbitrary definition of cutoff values in traded ownership shares to construct a binary
treatment indicator. We demonstrate the usefulness of this approach using data from European M&As and by relying on the example
of post-M&A employment effects. The empirical exercise reveals some heterogeneities over the whole distribution of acquired
ownership shares and across different types of M&As and country groups.
This survey summarises the state and development of European tax policy, in particular discussing the harmonisation progress
in direct as well as indirect taxes. Based on an overview over the theoretical and empirical literature on tax competition,
we further ask whether increased tax coordination is necessary to prevent a race to the bottom. We show that theoretical predictions
on the outcome of tax competition are ambiguous, and the empirical evidence in this regard is inconclusive as well. This,
in turn, gives rise to an only limited scope of stronger tax harmonisation.
Accounting and Business Research, 2014, 44, (3), pp.260-279
This paper studies the role of transfer pricing as a critical compliance issue. Specifically, we an-alyse whether and to what
extent the perceived risk associated with transfer pricing responds to country-, industry- and firm-specific characteristics.
Empirically, transfer pricing risk awareness is measured as a professional assessment reported by the person with ultimate
responsibility for transfer pricing in their company. Based on a unique global survey conducted by a Big 4 ac-counting firm
in 2007 and 2008, we estimate the number of firms reporting transfer pricing being the largest risk issue with regard to subsequent
tax payments. We find that transfer pricing risk awareness depends on variables accounting for general tax and transfer pricing
specific strat-egies, the types and characteristics of intercompany transactions the multinational firms are in-volved in,
their individual transfer pricing compliance efforts and resources dedicated to trans-fer pricing matters.
This paper analyzes the relationship between corporate taxation, firm age and debt. We adapt a standard model of capital structure
choice under corporate taxation, focusing on the financing and investment decisions a firm is typically faced with. Our model
suggests that the debt ratio is positively associated with the corporate tax rate, and negatively with firm age. Further,
we predict that the tax-induced advantage of debt is more important for older than for younger firms. To test these hypotheses
empirically, we use a cross-section of 405,000 firms from 35 European countries and 126 NACE 3-digit industries. In line with
previous research, we and that a firm's debt ratio increases with the corporate tax rate. Further, we observe that older firms
exhibit smaller debt ratios than their younger counterparts. Finally, consistent with our theoretical model, we and a positive
interaction between corporate taxation and firm age, indicating that the impact of corporate taxation on debt is increasing
over a firm's lifetime.