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Profit shifting structures deployed for tax management by many multinational corporations have recently come under intense regulatory scrutiny and heated public debate around the world. At the heart of the debate is the fact that profit shifting can often lead to conflicting outcomes for societies, shareholders and managers — posing complex financial and ethical dilemmas. In a recently published paper we propose a conceptual framework of the underlying costs and incentives of profit shifting in a multi-stakeholder world. We analyze the pathways through which the quality of a country's macro-institutions and corporate governance jointly determine the eventual net-gains of profit shifting. We deliberate on the salient aspects of the paper from the perspective of decision makers — shareholders, managers, and policy makers.

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Anish Sugathan

Anish Sugathan

IIM Ahmedabad

Anish Sugathan is Assistant Professor at the Business Policy Area of IIM Ahmedabad, where he teaches Strategic Management and Business Environment & Sustainability. He is also Associate at the Harvard Kennedy School’s Center for Business and Government, and is Research...

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Rejie George

Rejie George

IIM Bangalore

Rejie George is Professor at the Strategy Area of IIM Bangalore. Rejie’s research interests are in the areas of Corporate Governance, Strategic Management and International Business. Rejie has published in journals such as the Strategic Management Journal, Journal of...

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