We investigate whether international income-shifting aggressiveness affects local investments. Amid heightened scrutiny of international activities by tax authorities, firms can support income-shifting goals by locating investments consistent with reported income. As a consequence, we predict firms that aggressively shift income will make affiliate-level investment decisions less influenced by local investment opportunities than firms that do not aggressively shift income. We use affiliate-level data from multinational corporations to develop a firm-year proxy for the sensitivity of reported income to cross-border tax incentives. Results suggest firm-years with below-median income-shifting aggressiveness exhibit a typical responsiveness of local investments to investment opportunities, but firm-years with above-median income-shifting aggressiveness exhibit no statistical relation. Consistent with expectations, these results are stronger for firms with better governance or subject to greater tax authority scrutiny. Our tests extend the literature on investment distortions by documenting that multinational corporations’ international tax considerations alter their local tangible investment decisions.

我们调查了国际收入转移的积极性是否会影响当地投资。在税务机关对国际活动进行严格审查的情况下，公司可以通过定位与报告收入一致的投资来支持收入转移目标。因此，我们预测，与不积极转移收入的公司相比，积极转移收入的公司将使分支机构层面的投资决策受当地投资机会的影响更小。我们使用来自跨国公司的附属公司级别的数据来开发报告收入对跨境税收优惠的敏感性的公司年度代理。结果表明，收入转移积极性低于中位数的公司年份表现出当地投资对投资机会的典型反应，但收入转移积极性高于中位数的公司年份没有显示出统计相关性。与预期一致，这些结果对于治理更好或受到更严格税务机关审查的公司来说更为明显。我们的测试通过记录跨国公司的国际税收考虑改变了他们当地的有形投资决策，扩展了有关投资扭曲的文献。