Language：English   Publishing type：Research paper (scientific journal)  

DOI： 10.1111/iere.12569

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Authorship：Corresponding author   Language：English   Publishing type：Research paper (scientific journal)   Publisher：Springer Science and Business Media LLC  

<title>Abstract</title>We explore the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. The ROO under a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. We find that a value-added criterion of ROO restricts abusive transfer pricing by MNEs. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low- to high-tax country. Because the ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving one.

DOI： 10.1007/s10797-021-09689-8

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Authorship：Corresponding author   Language：English   Publishing type：Research paper (scientific journal)   Publisher：Wiley  

DOI： 10.1111/twec.13097

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Language：English   Publishing type：Research paper (scientific journal)  

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Language：English  

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Language：English  

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Language：English  

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Language：English  

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Authorship：Corresponding author   Language：English  

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Language：English  

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Authorship：Lead author,　Corresponding author   Language：English   Publishing type：Research paper (bulletin of university, research institution)  

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Event date： 2023.9.14 - 2023.9.16

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2023.8.14 - 2023.8.16

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2023.6.12

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2023.3.24

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2023.1.21

Language：Japanese   Presentation type：Oral presentation (general)  

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Event date： 2022.12.15

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2021.10.23 - 2021.10.24

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Tokyo (Online Meeting)  

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Event date： 2021.9.9 - 2021.9.11

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Ghent  

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Event date： 2021.8.27 - 2021.8.28

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2021.8.18 - 2021.8.20

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Iceland  

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Event date： 2020.10.17 - 2020.10.18

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2020.8.18 - 2020.8.20

Language：English   Presentation type：Oral presentation (general)  

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Event date： 2019.9.12 - 2019.9.14

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Bern  

This study explores the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. ROO of a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. The results suggest that a value-added criterion of ROO restricts MNEs’ abusive transfer pricing. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low-tax country to a high-tax country. Because ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving FTA.

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Event date： 2019.8.27 - 2019.8.30

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Lyon  

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs can shift profits between domestic production plants and foreign distribution affliates. In the beginning of integration, MNEs' plants are concentrated in the low-tax country, and in the later stage, this location pattern reverses. High taxes may favor multinational production; but it does not guarantee greater tax revenues. We also analyze tax competition between two unequal-sized countries and show that profit shifting leads to tougher competition.

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Event date： 2019.8.21 - 2019.8.23

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Glasgow  

High product differentiation enhances consumers’ utility and firms’ profits but at the same time makes it difficult for tax authorities to audit MNEs’ tax avoidance strategies, as the arm’s length principle is difficult to apply. This paper combines these two aspects of product differentiation and studies the interrelation between profit shifting and product differentiation. The model shows that MNEs engage in more investment in product differentiation in the presence of profit shifting opportunities and globalization accelerates the investment. the model also show that globalization can improve welfare in a non-tax haven.

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Event date： 2019.7.9 - 2019.7.11

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Strasboug  

High product differentiation enhances consumers’ utility and firms’ profits but at the same time makes it difficult for tax authorities to audit MNEs’ tax avoidance strategies, as the arm’s length principle is difficult to apply. This paper combines these two aspects of product differentiation and studies the interrelation between profit shifting and product differentiation. The model shows that MNEs engage in more investment in product differentiation in the presence of profit shifting opportunities and globalization accelerates the investment. the model also show that globalization can improve welfare in a non-tax haven.

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Event date： 2019.6.29 - 2019.6.30

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Tokyo  

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs can shift profits between domestic production plants and foreign distribution affliates. In the beginning of integration, MNEs' plants are concentrated in the low-tax country, and in the later stage, this location pattern reverses. High taxes may favor multinational production; but it does not guarantee greater tax revenues. We also analyze tax competition between two unequal-sized countries and show that profit shifting leads to tougher competition.

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Event date： 2019.6.12 - 2019.6.14

Language：English   Presentation type：Oral presentation (general)  

Venue：Kochek am See, Barvaria  

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs can shift profits between domestic production plants and foreign distribution affliates. In the beginning of integration, MNEs' plants are concentrated in the low-tax country, and in the later stage, this location pattern reverses. High taxes may favor multinational production; but it does not guarantee greater tax revenues. We also analyze tax competition between two unequal-sized countries and show that profit shifting leads to tougher competition.

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Event date： 2018.9.6 - 2018.9.7

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs can shift profits between domestic production plants and foreign distribution affliates. In the beginning of integration, MNEs' plants are concentrated in the low-tax country, and in the later stage, this location pattern reverses. High taxes may favor multinational production; but it does not guarantee greater tax revenues. We also analyze tax competition between two unequal-sized countries and show that profit shifting leads to tougher competition.

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Event date： 2018.8.21 - 2018.8.23

Language：English   Presentation type：Oral presentation (general)  

Venue：University of Tampere  

When multinational enterprises (MNEs) separate the geographical location of affiliates, they can shift profits between the affiliates by manipulating intra-firm prices of inputs. We show that if the international tax difference between the parent and the host countries is large, MNEs choose to separately locate their affiliates in the two countries. We also investigate the impact of the arm’s length principle (ALP) on the location choice, which requires that the intra-firm price of inputs should be set equal to the price of similar inputs for the independent downstream firms. The ALP may change the location choice of MNEs, bringing smaller tax revenues to the host country, but greater revenues globally.

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Event date： 2018.4.19 - 2018.4.20

Language：English   Presentation type：Poster presentation  

Venue：Univeresity of Nottingham  

When multinational enterprises (MNEs) separate the geographical location of affiliates, they can shift profits between the affiliates by manipulating intra-firm prices of inputs. We show that if the international tax difference between the parent and the host countries is large, MNEs choose to separately locate their affiliates in the two countries. We also investigate the impact of the arm’s length principle (ALP) on the location choice, which requires that the intra-firm price of inputs should be set equal to the price of similar inputs for the independent downstream firms. The ALP may change the location choice of MNEs, bringing smaller tax revenues to the host country, but greater revenues globally.

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Language：Japanese   Presentation type：Oral presentation (general)  

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Language：Japanese  

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Language：English   Presentation type：Oral presentation (general)  

Venue：Osaka University  

This study explores the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. ROO of a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. The results suggest that a value-added criterion of ROO restricts MNEs’ abusive transfer pricing. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low-tax country to a high-tax country. Because ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving FTA.

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Language：English   Presentation type：Oral presentation (general)  

Venue：Nihon University  

High product differentiation enhances consumers’ utility and firms’ profits but at the same time makes it difficult for tax authorities to audit MNEs’ tax avoidance strategies, as the arm’s length principle is difficult to apply. This paper combines these two aspects of product differentiation and studies the interrelation between profit shifting and product differentiation. The model shows that MNEs engage in more investment in product differentiation in the presence of profit shifting opportunities and globalization accelerates the investment. the model also show that globalization can improve welfare in a non-tax haven.

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Language：English   Presentation type：Oral presentation (general)  

Venue：Otaru University of Commerce Sapporo Satellite  

This study explores the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. ROO of a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. The results suggest that a value-added criterion of ROO restricts MNEs’ abusive transfer pricing. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low-tax country to a high-tax country. Because ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving FTA.

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Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

This study explores the new roles of rules of origin (ROO) when multinational enterprises (MNEs) manipulate their transfer prices to avoid a high corporate tax. ROO of a free trade agreement (FTA) require exporters to identify the origin of exports to be eligible for a preferential tariff rate. The results suggest that a value-added criterion of ROO restricts MNEs’ abusive transfer pricing. Interestingly, an FTA with ROO can induce MNEs to shift profits from a low-tax country to a high-tax country. Because ROO augment tax revenues inside FTA countries, they can transform a welfare-reducing FTA into a welfare-improving FTA.

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Language：English   Presentation type：Oral presentation (general)  

Venue：Hitotsubashi University  

High product differentiation enhances consumers’ utility and firms’ profits but at the same time makes it difficult for tax authorities to audit MNEs’ tax avoidance strategies, as the arm’s length principle is difficult to apply. This paper combines these two aspects of product differentiation and studies the interrelation between profit shifting and product differentiation. The model shows that MNEs engage in more investment in product differentiation in the presence of profit shifting opportunities and globalization accelerates the investment. the model also show that globalization can improve welfare in a non-tax haven.

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Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

High product differentiation enhances consumers’ utility and firms’ profits but at the same time makes it difficult for tax authorities to audit MNEs’ tax avoidance strategies, as the arm’s length principle is difficult to apply. This paper combines these two aspects of product differentiation and studies the interrelation between profit shifting and product differentiation. The model shows that MNEs engage in more investment in product differentiation in the presence of profit shifting opportunities and globalization accelerates the investment. the model also show that globalization can improve welfare in a non-tax haven.

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Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

Multinational enterprises (MNEs) are incentivized to use transfer pricing in tax planning when corporate tax rates differ in different countries. The incentive is stronger when MNEs own intangible assets which can easily be shifted across countries. To mitigate such strategic avoidance of tax payments, the OECD proposed the arm's length principle (ALP). This paper investigates how the ALP affects MNEs' licensing strategies and welfare in the presence of a tax haven. We specifically deal with two methods of the ALP: the comparable uncontrolled price method and the transactional net margin method. The ALP may distort MNEs' licensing decisions, because providing a license to unrelated firms restricts the MNE's profit-shifting opportunities due to the emergence of comparable transactions. In particular, the avoidance of licensing in the presence of the ALP may worsen domestic welfare if the licensee and the MNE’s subsidiary do not compete in the domestic market, but may improve welfare if they compete.

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Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

When multinational enterprises (MNEs) separate the geographical location of affiliates, they can shift profits between the affiliates by manipulating intra-firm prices of inputs. We show that if the international tax difference between the parent and the host countries is large, MNEs choose to separately locate their affiliates in the two countries. We also investigate the impact of the arm’s length principle (ALP) on the location choice, which requires that the intra-firm price of inputs should be set equal to the price of similar inputs for the independent downstream firms. The ALP may change the location choice of MNEs, bringing smaller tax revenues to the host country, but greater revenues globally.

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Language：English   Presentation type：Oral presentation (general)  

Venue：University of Munich  

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs can shift profits between domestic production plants and foreign distribution affliates. In the beginning of integration, MNEs' plants are concentrated in the low-tax country, and in the later stage, this location pattern reverses. High taxes may favor multinational production; but it does not guarantee greater tax revenues. We also analyze tax competition between two unequal-sized countries and show that profit shifting leads to tougher competition.

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Language：English   Presentation type：Oral presentation (general)  

Venue：Nihon University  

When multinational enterprises (MNEs) separate the geographical location of affiliates, they can shift profits between the affiliates by manipulating intra-firm prices of inputs. We show that if the international tax difference between the parent and the host countries is large, MNEs choose to separately locate their affiliates in the two countries. We also investigate the impact of the arm’s length principle (ALP) on the location choice, which requires that the intra-firm price of inputs should be set equal to the price of similar inputs for the independent downstream firms. The ALP may change the location choice of MNEs, bringing smaller tax revenues to the host country, but greater revenues globally.

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Language：English   Presentation type：Oral presentation (general)  

Venue：Hitotsubashi University  

When multinational enterprises (MNEs) separate the geographical location of affiliates, they can shift profits between the affiliates by manipulating intra-firm prices of inputs. We show that if the international tax difference between the parent and the host countries is large, MNEs choose to separately locate their affiliates in the two countries. We also investigate the impact of the arm’s length principle (ALP) on the location choice, which requires that the intra-firm price of inputs should be set equal to the price of similar inputs for the independent downstream firms. The ALP may change the location choice of MNEs, bringing smaller tax revenues to the host country, but greater revenues globally.

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