Firm outward direct investment and multinational activity under domestic taxes
利用中国税收统一改革，发现国内公司税提高促使外资企业增加对外直接投资，尤其是中方控股的合资企业，这反映了生产向海外转移。
Abstract We study the effect of domestic corporate tax on firms' outward direct investment (ODI) decisions. We exploit a tax unification reform in China that raises corporate income tax rates on foreign‐funded firms but reduces those on domestic Chinese firms. Using a difference‐in‐differences estimator that compares the ODI of foreign affiliates and joint ventures with private domestic firms before and after the reform, we find that a higher domestic corporate tax rate increased the ODI of foreign firms, particularly for joint ventures with Chinese majority shareholders. We show evidence that the increases in firm ODI reflect production relocation out of China.