The Indirect Effect of Import Competition on Corporate Tax Avoidance

[Paper] [SSRN working paper] [Slides]


The role of competition in corporate tax avoidance is theoretically unclear in the existing literature. This paper empirically examines this role, with a focus on import competition. I exploit financial statements to measure tax avoidance of US-listed firms and the conferral of Permanent Normal Trade Relations status on China as a quasi-natural experiment to establish causality. The results reveal a positive effect of import competition on corporate tax avoidance. Furthermore, the results are driven entirely by multinational enterprises. In response to the China shock, these firms invested in intangible assets to escape competition, but these intangibles also allowed them to shift more profits toward low-tax countries. These findings shed light on the determinants of corporate tax avoidance. More generally, they help understand the decline in the average effective tax rate of US publicly listed firms and the recent backlash against large corporations and globalization.

Learning the Ropes? Executive Experience and Location Choices of Multinational Firms

[Paper] [SSRN working paper]

Preliminary - New version coming soon

What makes firms invest in foreign countries? In this paper, I show that beyond country- and firm-specific characteristics, experience of executives is crucial to understand multinational enterprises' location choices. Using a dataset on executives and subsidiaries of the largest US-listed firms, I find that hiring an executive having previously worked for a company that had at least one subsidiary in a given country increases the average probability to own subsidiaries in this country by 14 percent after three years. Moreover, I observe a similar effect at the intensive margin and a wage premium for experience in managing multinational activities. A causal interpretation of the results is possible by using movements due to unexpected events as sources of exogenous shocks (e.g., death of incumbent executives) and by exploiting the conferral of the Permanent Normal Trade Relations status on China as a quasi-natural experiment. Altogether, the findings suggest that executives develop country-specific knowledge, a valuable asset in the labor market that helps companies intensify their presence abroad. Because they notably hold for tax havens, they also shed light on the mechanisms whereby profit shifting activities spread across multinational corporations and imply that tracking executives could help public authorities detect aggressive tax planning.

Profit Shifting, Employee Pay, and Inequalities: Evidence from US-Listed Companies

[Paper] [SSRN working paper]

Preliminary - New version coming soon

Over the last few years, corporate tax avoidance has become a salient policy issue and has regularly been accused of aggravating income inequalities. Yet, systematic empirical evidence on its distributional implications remains lacking. In this paper, I explore the effect of profit shifting activities of multinational enterprises on employee pay. Using a rich database on executives, foreign subsidiaries, and financial statements of US-listed companies, I find that this effect substantially varies across occupations. While the compensation of chief executive officers and chief financial officers increases when their firm enters tax havens, non-executive employees, on the contrary, see their wage fall. Also, these reactions are more pronounced in intangible-intensive sectors. These new empirical findings are consistent with economic theory, cast light on the consequences of profit shifting, and might help explain recent trends in income inequalities.

Intra-Industry Diffusion of Profit Shifting Practices

[Paper] [SSRN working paper]

Preliminary and incomplete

Does tax knowledge spill over across firms? Using data on US-listed firms and an event study approach, I provide systematic evidence that profit shifting strategies spread across companies within sectors. The probability that an enterprise owns a subsidiary in a specific tax haven increases if another enterprise operating in the same sector also does. A battery of three-way fixed effects and the non-existence of pre-trends allow a causal interpretation of the results. These findings suggest that firms replicate the tax avoidance schemes of their peers and carry policy implications.


Quantifying the Effects of International Tax Reforms (with S. Laffitte, M. Parenti, and F. Toubal)

Working paper coming soon

Many reforms have been proposed to ensure that multinational firms pay their income taxes where they carry on their activities. Assessing ex-ante their impact requires a counterfactual analysis that takes into account the level of corporate taxation and the set of factors influencing the location of sales, production, and profits of multinational firms. We build a quantitative general equilibrium model featuring multinational activities and international corporate taxation. The model is calibrated using recent data on bilateral trade of goods and services, multinational sales, and profits for 40 countries, including 7 major tax havens. Specifically, we propose a new methodology to infer the amount of bilateral profits shifted by multinational corporations. The model predicts the change in the relative attractiveness of countries, the variation of tax revenues and inequalities within countries, and the world-level efficiency induced by the implementation of a broad range of different reforms. These include scenarios that either reallocate taxing rights across countries and/or address profit shifting to entities subject to no or very low taxation. We show that reforms aimed at curbing profit shifting are more likely to gain political consensus than those which redistribute taxing rights. We also study the optimal parameters (minimum tax rate and allocation key) in different corporate tax configurations.



2nd BICEPS Conference on Corruption, Tax Evasion, and Institutions (Baltic International Centre for Economic Policy Studies)
ECARES PhD Seminar (Université Libre de Bruxelles)
European Association of Labor Economists Annual Conference (University of Padua)
Global Economic Policy Group Meeting on Politics, Integration and Trade (FernUniversität and University of Westminster)
Human Rights and the 4 “Rs” of Tax Justice (Tax Justice Network)
MaCCI Annual Conference (University of Mannheim and ZEW)
Meeting of the European Public Choice Society (Université de Lille)
14th RGS Doctoral Conference in Economics (Ruhr Graduate School in Economics)
Royal Economic Society Annual Conference (Queen’s University)
Scottish Economic Society Annual Conference (University of Glasgow)
25th Spring Meeting of Young Economists (University of Bologna)
Society of Labor Economists Annual Conference (SOLE)
9th Workshop on Industrial and Public Economics (Universitat Rovira i Virgili)


CEPS Seminar (ENS Paris Saclay)
DSE Winter School -
Econometric Society (Delhi School of Economics)
ECARES Internal Seminar (Université Libre de Bruxelles)
ECARES PhD Seminar (Université Libre de Bruxelles)
European Winter Meeting - Econometric Society (University of Nottingham)
Graduate Student Chinese Economy Workshop (University of International Business and Economics)
Graduate Student International Political Economy Workshop (Yale University)
Italian Trade Study Group Annual Meeting (
Università Politecnica delle Marche)
JKU Economics Research Seminar (
Johannes Kepler Universität Linz)
Seminars in Economic Geography (UCLA and University College Dublin)
Young Economists Symposium (University of Pennsylvania)
15th WIEM Annual Conference (University of Warsaw)


5th DIAL Development Conference (Université Paris Dauphine)
Doctoral Workshop in Economics (Université Catholique de Louvain)
ECARES PhD Workshop (Université Libre de Bruxelles)
21st European Trade Study Group Annual Conference (World Trade Institute)
12th FIW Research Conference (Austrian Institute of Economic Research)
21st INFER Annual Conference (Vrije Universiteit Brussel)
19th RIEF Doctoral Meeting (Aix-Marseille School of Economics)


DG TAXUD Seminar (European Commission)
10th EACES/IOS/APB Workshop (Akademie für Politische Bildung)
ECARES PhD Workshop (Université Libre de Bruxelles)
20th European Trade Study Group Annual Conference (Warsaw School of Economics)


Revisiting the Effect of the Business Environment and Firm Capabilities on Firm Performance: Theory and Evidence from India

Master thesis available upon request

Recipient of the Hans Raupach Best Paper Award from the European Association for Comparative Economic Studies

Are firms with low capabilities in favorable environments as successful as firms with high capabilities in bad environments? In this paper, I exploit a rich dataset of manufacturing firms and regional disparities in India to disentangle the effect of the business environment, state-specific (e.g., state-level Internet coverage), and that of capabilities, firm-specific (e.g., having a website), on firm performance. First, I uncover new stylized facts on the relationship between the business environment, firm capabilities, and firm performance. Then, I develop a theoretical model that rationalizes them, allows the business environment and firm capabilities to each affect product innovation and export participation, and guides the econometric analysis. The identification strategy, based on instrumental variables, allows a causal interpretation of the results. The results reveal that firm capabilities directly spur only product innovation, while the business environment directly drives only export participation. These findings are validated by various robustness checks and imply that policies aimed to boost firm performance should strengthen both the business environment and firm capabilities to maximize their success.