Tax havens and transfer pricing intensity: Evidence from the French CAC-40 listed firms

Figures & data

Table 1. Variables, indicators, measurement proxy and predicted sign

Variables	Indicators	Measurement	Predicted sign
Transfer Pricing Intensity	TPIit	Ratio of related party transaction receivables over total receivables
Intangible Assets	INTANit	Ln(Intangible Assets)	+
Firm Size	SIZEit	Ln(Total Assets)	+
Tax Rate	TAXit	(Income tax expense—Deferred tax expense)/Profit before income tax	–
Leverage	LEVit	Total debt over equity	+

Table 2. Correlation matrix

	TPIit	INTANit	SIZEit	TAXit	LEVit	VIF
TPIit	1.000
INTANit	−0.221	1.000				1.53
SIZEit	−0.045	0.587	1.000			1.57
TAXit	−0.085	0.023	−0.029	1.000		1.01
LEVit	0.077	0.067	0.163	0.044	1.000	1.03

Table 3. Summary statistics

	Observations	Mean	STD.	Median	Minimum	Maximum
TPIit	132	0.081	0.177	0.008	0.000	0.933
INTANit	132	3.830	0.592	3.951	2.199	4.695
SIZEit	132	4.540	0.371	4.543	3.828	5.361
TAXit	132	0.239	0.329	0.285	−2.670	0.679
LEVit	132	2.098	1.457	1.585	0.382	7.841

Table 4. Regression results

	(1)	(2)
	Transfer Pricing Intensity	Transfer Pricing Intensity
INTANGIBILITY	−0.086***	−0.086***
	(0.010)	(0.010)
FIRM SIZE	0.052***	0.053***
	(0.006)	(0.006)
TAX RATE	−0.042*	−0.045**
	(0.015)	(0.014)
LEVRAGE	0.010***	0.010***
	(0.001)	(0.001)
Constant	0.165*	0.180*
	(0.056)	(0.063)
Observations	132	132
No. of Firms	33	33
R-squared	0.072	0.076
Time Effect	No	Yes
F-Statistics	224.91***

Transfer Pricing Intensity is the ratio of related party transaction receivables over total receivables; INTANGIBILITY is the natural logarithm of intangible assets; Firm SIZE is the natural logarithm of total assets; TAX is the income tax expense (minus the deferred tax) scaled by profit before income tax; LEVERAGE is the total debt scaled by the shareholder’s equity.

Standard errors are in parenthesis; *** p < 0.01, ** p < 0.05, * p < 0.1.