But how much of that result is due to liberal tax regimes on fdi? True that profit shifting might not be entirely due to tax evasion (@RadleyBen has found that in DRC mining) but the macro impacts might still be major, effecting revenues through overall effect on agg demand.
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Replying to @AndrewM_Fischer @JesseLGriffiths and
Its mainly because FDI by foreign MNCs responsible for a smaller proportion of value added across economies than we imagine (< salience of big global brands) Zucman estimates gross surplus of foreign multinationals (outside of their home) 3% of global GDP https://www.cgdev.org/sites/default/files/reading-missing-profits-nations.pdf …pic.twitter.com/PHF1LrIqaw
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Replying to @MForstater @JesseLGriffiths and
These are global measures. They really need to be broken down regionally or even by country, because these data most represent larger and wealthier economies, which yes, are mostly domestic. But the effects of MNC profit shifting are much greater for poorer economies.
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Replying to @AndrewM_Fischer @MForstater and
Also, this is assuming that profit shifting only concerns foreign firms, whereas much of it is by domestic firms. Indeed, even much of profit shifting by MNCs occurs through subsidiaries and affiliates that are effectively domestically resident (e.g. Anglo-American Tanzania etc).
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Replying to @AndrewM_Fischer @JesseLGriffiths and
Yes there is not much data (particularly for LICs), in the paper are breakdowns for Mexico & India. It looks similar, but the absolute numbers are much smaller. *Subsidiaries and affiliates* of MNCs is what is being assessed in terms of "foreign companies".pic.twitter.com/tdUwwxB6xX
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Replying to @MForstater @AndrewM_Fischer and
Popular perceptions of scale on this issue are out of whackhttps://www.cgdev.org/publication/can-stopping-tax-dodging-multinational-enterprises-close-gap-development-finance …
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Replying to @MForstater @JesseLGriffiths and
Mexico and India are examples of large economies, continental in the case of India. I have detected anomalies in the BoP of Zambia that are probably attributed to transfer pricing in the range of 10-15% of GDP, in addition to properly registered profit remittances of 5%.
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Replying to @AndrewM_Fischer @JesseLGriffiths and
I would be cautious of interpreting BoP anomalies as transfer (mis)pricing, & beware of great expectations about missing billions from Zambia! https://hiyamaya.wordpress.com/2015/10/28/zambia-copper-again/ … https://www.cgdev.org/blog/stop-spreading-myth-zambia-not-losing-3-billion-tax-avoidance … ....dreams of billions from transfer pricing undermines careful work to collect millions
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Replying to @MForstater @JesseLGriffiths and
Very interesting. Thanks! The discreps I am analysing do not come from dot stats and are diff from this. Very few people are aware, although they were confirmed to me by Z central bank. IMF has been trying to help them figure it out, with help of BIS, so not to be belittled.
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Replying to @AndrewM_Fischer @MForstater and
I need to write up the analysis. Well send when I do.
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Replying to @AndrewM_Fischer @JesseLGriffiths and
I will be interested!
1:20 PM - 15 Feb 2019
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