Abstract: 

Using 50,000 tests published in the AER, JPE, and QJE, we identify a residual in the distribution of tests that cannot be explained solely by journals favoring rejection of the null hypothesis. We observe a two-humped camel shape with missing p-values between 0.25 and 0.10 that can be retrieved just after the 0.05 threshold and represent 10-20 percent of marginally rejected tests. Our interpretation is that researchers inflate the value of just-rejected tests by choosing "significant" specifications. We propose a method to measure this residual and describe how it varies by article and author characteristics.

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Tax havens hold 20% of global cross-border banking debt, yet the drivers of their dominance as the largest financing hub for banks remain unclear. Using a unique global dataset and a new design separating regulatory arbitrage from tax avoidance, we show that tax motives drive the location of intra-group debt of multinational banks, especially when they are located in high-tax countries. We provide the first direct global evidence of bank profit shifting through debt shifting, complementing prior work on single-country settings or indirect global evidence. We estimate that 57-88% of intra-group banking debt in tax havens may lack economic substance.

Location:

ENS Paris-Saclay
4 avenue des Sciences, 91190, Gif-sur-Yvette