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Although tax-motivated income shifting has been widely explored, no studies have as yet analyzed the association between ownership structure and management decisions about income shifting. The ownership structure of multinational groups is characterized by different levels of minority interests, and our aim is to establish whether income shifting is explained by the aim of expropriation of minorities, as well as taxation avoidance.

We collect data on a sample of European parent companies located in five countries and their foreign subsidiaries, and run a multivariate regression based on the Huizinga and Laeven (2008) model.

Our results support the idea of minority expropriation, finding evidence of ownership-motivated income shifting. We also find that the level of minority protection affects ownership-motivated income shifting, and that, when both are present, expropriation is statistically significant.

Although the study looks at a wide range of subsidiaries, a limitation may be that it examines only firms having parent companies in five European countries. Further research would overcome this limitation and extend the literature and take into account other income-shifting contextual variables. Our results may lead regulators to pay more attention to the protection of minority interests.

This research offers insights to companies and investors, and should help them to make better-informed decisions and evaluate the best contexts for investments.

This study enriches the literature on income shifting by revealing that it can be caused by factors other than the desire to avoid taxation. It suggests that ownership structure is crucial.

This article examines the extent to which costs imposed on customers and other factors influence tax-motivated income shifting when corporate taxpayers expect tax rates to decline. I find that sellers of durable goods shift defer less income to lower tax rate periods than sellers of nondurable goods. This is consistent with shifting firms considering the effect of their income shifts on their customers. There is also limited evidence that firms with greater market power shift more income than other firms. In addition, I find evidence that, controlling for political costs and scale effects, smaller firms shifted more income than larger firms. This result is inconsistent with a “tax sophistication” hypothesis that larger firms are better able to engage in tax planning activities than smaller firms.

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on tax avoidance in multinational groups with high ownership concentration. This study aims to analyze the effect of high ownership concentration on cross-jurisdictional tax-motivated income shifting.

To test the hypotheses, this study focuses on European multinational groups. Data are collected on European parent firms and each subsidiary. The model considers the natural logarithm of profit before tax and tax incentive.

Findings show that subsidiaries shift income for tax avoidance purposes. The alignment of shareholders’ interests and ownership concentration leads to higher levels of tax avoidance through subsidiaries’ infra-group transactions. High ownership concentration decreases the influence of minority interests and allows parent company shareholders to choose a tax avoidance strategy more freely.

The results suggest that taxation levels need to be harmonized to reduce the incentive for tax avoidance and the incentive of governments to reduce their statutory tax rate, to shift profits inwards and reduce outward flow. Without international coordination, this approach may lead to the unevenness of legislative frameworks around the world, and bring significant disadvantages for some countries, influencing economic growth and business development.

This study extends prior findings showing that tax-motivated income shifting as a method of tax avoidance in European multinational groups is stronger in groups with high levels of ownership concentration. This means that managers have the incentive to shift income between subsidiaries for tax and ownership benefits in favor of the parent company’s shareholders and against minority interests.

The purpose of this paper is to examine the cross‐sectional relation between the value of cross‐border intrafirm transfers (CITs) and three dependent variables: return on investment (ROI), the US effective tax rate (ETRUS), and the global effective tax rate (ETRGL) to assess the existence or nonexistence of cross‐jurisdictional income shifting.

Regression analysis is used to test the relationship between CIT and accounting performance and effective tax rates.

The results indicate that ROI and ETRUS increase whereas ETRGL decreases with the extent of CITs after we control for variables that impact earnings and taxes (e.g. size, industry classification, internationalization, tax shelter, and growth). This suggests that firms earn income, on average, in jurisdictions with tax rates greater than the USA, such that diverting income from overseas to the USA is a tax‐saving action. The tax results are consistent with Jacob and Mills and Newberry's findings that firms shifted income into the USA. The results also reveal that companies that engage in CITs are those that are large, relatively more profitable, and pay more US taxes.

This study does not differentiate between transfer pricing schemes for tax minimization reasons from those done for earnings management purposes, which should be addressed by future research.

Results have public policy implications as an understanding of how CITs affect accounting performance and taxes is important for the craft of tax policy and transfer price regulation.

This study furthers our understanding of the impact of CITs on earnings and taxes, an important component of accounting research which has not been properly addressed by prior studies.

This study examines the importance of income income-shifting arrangements of US multinational corporations (MNCs) on future stock price crash risk.

This study employs a sample of 7,641 corporation-year observations over the 2005–2017 period and uses ordinary least squares regression analysis.

The authors find that the income-shifting arrangements of MNCs are positively and significantly associated with stock price crash risk after controlling for corporate tax avoidance and other known determinants of stock price crash risk in the regression model. This result is robust to alternative measures of stock price crash risk and income-shifting, and several endogeneity tests. The authors also observe that income-shifting arrangements increase stock price crash risk both directly and indirectly through the information opacity channel. Finally, in cross-sectional analyses, the authors find that the positive association between income-shifting and stock price crash risk is more pronounced for MNCs that use tax haven subsidiaries and have weak corporate governance mechanisms.

The authors provide new empirical evidence that MNCs will likely face significant capital market consequences regarding their income-shifting arrangements.

The purpose of this paper is to examine the potential use of international transfer pricing (ITP) as an income shifting mechanism by multinational corporations (MNCs) in developing countries. The paper postulates that income shifting through ITP is likely to be more pronounced in developing countries where weak institutions are present.

The paper uses a unique unbalanced panel data of 18 companies listed on the Ghana Stock Exchange covering the period of nine years (2008–2016), to investigate whether MNCs use ITP to shift income out of the country. The comparison is made using an indirect approach where performance (e.g. profit before tax) and post-performance measures (e.g. dividend payment) are used for an equal number of foreign and local companies. The empirical analyses include t-tests, pooled and random effects logistic regressions.

The results show significant differences between foreign controlled entities (FCEs) and Ghanaian controlled entities in terms of capability, profitability and dividend distribution. Since there is a positive between these measures, the results do not suggest possible income shifting by FCEs through ITP.

This paper uses an indirect method of investigating income shifting among MNCs. For future studies, a more direct method can be adopted by examining import and export prices of specific products for both foreign and domestic firms.

The study investigates the possibility of income shifting arising from ITP practices among multinationals in developing countries. To the best of the authors’ knowledge, this paper is the first in this regard. Thus, the study contributes to the transfer pricing and income shifting literature by providing evidence from a developing country.

The purpose of this paper is to address the question of whether Malaysian public listed companies manage their earnings in response to changes in tax polices. The context of this study is the tax waiver year of 1999 which came about from the introduction of the Self Assessment System (SAS) by the Inland Revenue Board of Malaysia (IRBM) in the year 2000. If companies are to minimize tax liabilities, then the tax waiver year of 1999 may provide a substantial incentive for these companies to manage earnings in 1999.

The modified Jones Model (adjusted) is used to obtain the discretionary current accruals which represent earnings management. It is hypothesized that there is a significant positive discretionary current accrual (income increasing earnings management) in the tax waiver year of 1999.

The results indicate that that there is a negative relationship between earnings management and the effect of the tax waiver year of 1999. These results suggest that the magnitude of discretionary current accrual is not related to the tax waiver year in a way that is consistent with tax‐motivated income shifting behavior. Instead companies tend to manipulate earnings downwards during severe economic downturn. This is in line with Healy's bonus maximization hypothesis.

The test sample is limited to public listed companies only and some companies are excluded due to insufficient data. Therefore, the results cannot be a representation of Malaysian companies' practices.

The findings of this paper contribute to the sparse literature on tax‐induced earnings management practices in Malaysia. The findings could be of value to the IRBM in designing and improving on the plans for future tax‐based incentive schemes.

Many studies find that taxes influence capital location, income shifting, and capital structure decisions of multinational companies. So, reasonably estimating the marginal tax effect of international business decisions is important. However, simple marginal tax rate (MTR) proxies, such as a foreign country's top statutory rate or a rate that assumes remittance of all foreign profits as current dividends, fail to capture many tax law complexities. This article develops an algebraic “mixed remittance” model for calculating a U.S. company's MTR on its foreign subsidiary's profits. In contrast to the simpler proxies, the mixed remittance model allows foreign profits to be remitted in different forms (i.e. not just as dividends) and across varying time periods (i.e. not just the current period[t Also, the mixed remittance model considers withholding taxes, tax deferrals from postponed dividends, and foreign tax credit positions. Paired t-tests show that the resulting MTR measure often differs significantly from the two simpler MTR proxies.

Financial capability is considered to be an important concept that has drawn the attention of many world nations. While the literature suggests various studies on financial capability and financial wellbeing, focus on their combined significance has been limited. The purpose of this paper is to examine how financial capability affects the financial wellbeing of women in community-based organizations and how decision-making ability mediated this relationship.

In total, 1,000 women who are associated with the community-based organization – Kudumbashree in the state of Kerala, India participated in the survey-based study.

The structural equation modelling results show that there exists a significant relationship between financial capability and the financial wellbeing of women in CBOs. Further, decision-making ability was identified as a significant mediator in this relationship thus establishing a partial mediation effect.

The financial social workers can focus their activities on promoting financial capability and decision making aspects of women from middle/low income families to facilitate their financial wellbeing. The scope for financial socialisation and proper orientation is more for the women associated with the community based organisations. This opportunity can be made use by the government authorities and other practitioners to change their financial outlook and contribute towards the empowerment of these women from the grass root level.

The studies related to financial literacy and financial inclusion are available in the Indian context, but the conceptualization of financial capability is still an under-researched area in India. Hence, this study is an attempt to explain the capability-wellbeing relationship from a financial point of view in the Indian context, and further establishes its connection with the individual's decision-making ability. To strengthen the research base, the study was conducted among the women in the community-based organization who belong to middle and low-income families.

This paper proposes and models stock loan lotteries, a financial innovation that improves individual investor welfare. Stock loan lotteries are prize-linked payoffs using securities lending fees.

This paper solves an existing theoretical model for an investor's utility-maximizing choices with and without stock loan lotteries and compares outcomes.

Stock loan lotteries motivate prospect theory investors to buy and hold risky assets with high expected returns. Stock loan lotteries improve welfare more for poor investors and improve welfare more in a model with market frictions such as trading costs.

Stock loan lotteries increase household savings, leading to greater financial wealth and security in retirement.

This paper proposes a new financial product that improves financial outcomes for individual investors.